Correlation Between TC Energy and Avance Gas
Can any of the company-specific risk be diversified away by investing in both TC Energy and Avance Gas 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 TC Energy and Avance Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC Energy Corp and Avance Gas Holding, you can compare the effects of market volatilities on TC Energy and Avance Gas 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 TC Energy with a short position of Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and Avance Gas.
Diversification Opportunities for TC Energy and Avance Gas
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRP and Avance is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding and TC Energy 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 TC Energy Corp are associated (or correlated) with Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of TC Energy i.e., TC Energy and Avance Gas go up and down completely randomly.
Pair Corralation between TC Energy and Avance Gas
Considering the 90-day investment horizon TC Energy is expected to generate 9.9 times less return on investment than Avance Gas. But when comparing it to its historical volatility, TC Energy Corp is 9.12 times less risky than Avance Gas. It trades about 0.07 of its potential returns per unit of risk. Avance Gas Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 396.00 in Avance Gas Holding on September 2, 2024 and sell it today you would earn a total of 646.00 from holding Avance Gas Holding or generate 163.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
TC Energy Corp vs. Avance Gas Holding
Performance |
| Timeline |
| TC Energy Corp |
| Avance Gas Holding |
TC Energy and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and Avance Gas
The main advantage of trading using opposite TC Energy and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.| TC Energy vs. Enterprise Products Partners | TC Energy vs. Kinder Morgan | TC Energy vs. Energy Transfer LP | TC Energy vs. ONEOK Inc |
| Avance Gas vs. International Seaways | Avance Gas vs. Scorpio Tankers | Avance Gas vs. Dorian LPG | Avance Gas vs. Teekay Tankers |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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