Correlation Between Texas Pacific and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Texas Pacific and AGL Energy 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 Texas Pacific and AGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Pacific Land and AGL Energy Limited, you can compare the effects of market volatilities on Texas Pacific and AGL Energy 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 Texas Pacific with a short position of AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Pacific and AGL Energy.
Diversification Opportunities for Texas Pacific and AGL Energy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Texas and AGL is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Texas Pacific Land and AGL Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy Limited and Texas Pacific 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 Texas Pacific Land are associated (or correlated) with AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy Limited has no effect on the direction of Texas Pacific i.e., Texas Pacific and AGL Energy go up and down completely randomly.
Pair Corralation between Texas Pacific and AGL Energy
Considering the 90-day investment horizon Texas Pacific Land is expected to generate 1.42 times more return on investment than AGL Energy. However, Texas Pacific is 1.42 times more volatile than AGL Energy Limited. It trades about 0.19 of its potential returns per unit of risk. AGL Energy Limited is currently generating about 0.06 per unit of risk. If you would invest 49,357 in Texas Pacific Land on September 2, 2024 and sell it today you would earn a total of 110,652 from holding Texas Pacific Land or generate 224.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 57.26% |
| Values | Daily Returns |
Texas Pacific Land vs. AGL Energy Limited
Performance |
| Timeline |
| Texas Pacific Land |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Texas Pacific and AGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Pacific and AGL Energy
The main advantage of trading using opposite Texas Pacific and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Pacific position performs unexpectedly, AGL Energy 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 AGL Energy will offset losses from the drop in AGL Energy's long position.| Texas Pacific vs. Magnolia Oil Gas | Texas Pacific vs. Civitas Resources | Texas Pacific vs. California Resources Corp | Texas Pacific vs. Matador Resources |
| AGL Energy vs. Emerson Radio | AGL Energy vs. BJs Restaurants | AGL Energy vs. GEN Restaurant Group, | AGL Energy vs. Canlan Ice Sports |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |