Correlation Between Towngas China and UGI
Can any of the company-specific risk be diversified away by investing in both Towngas China and UGI at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Towngas China and UGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Towngas China and UGI Corporation, you can compare the effects of market volatilities on Towngas China and UGI and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Towngas China with a short position of UGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Towngas China and UGI.
Diversification Opportunities for Towngas China and UGI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Towngas and UGI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Towngas China and UGI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corporation and Towngas China is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Towngas China are associated (or correlated) with UGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corporation has no effect on the direction of Towngas China i.e., Towngas China and UGI go up and down completely randomly.
Pair Corralation between Towngas China and UGI
If you would invest 2,335 in UGI Corporation on September 3, 2024 and sell it today you would earn a total of 542.00 from holding UGI Corporation or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Towngas China vs. UGI Corp.
Performance |
| Timeline |
| Towngas China |
| UGI Corporation |
Towngas China and UGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Towngas China and UGI
The main advantage of trading using opposite Towngas China and UGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Towngas China position performs unexpectedly, UGI can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UGI will offset losses from the drop in UGI's long position.| Towngas China vs. TechnipFMC PLC | Towngas China vs. Deckers Outdoor | Towngas China vs. Jackson Financial | Towngas China vs. OppFi Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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