Correlation Between UGI and Snam SpA
Can any of the company-specific risk be diversified away by investing in both UGI and Snam SpA 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 UGI and Snam SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UGI Corporation and Snam SpA ADR, you can compare the effects of market volatilities on UGI and Snam SpA 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 UGI with a short position of Snam SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGI and Snam SpA.
Diversification Opportunities for UGI and Snam SpA
Very good diversification
The 3 months correlation between UGI and Snam is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding UGI Corp. and Snam SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA ADR and UGI 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 UGI Corporation are associated (or correlated) with Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA ADR has no effect on the direction of UGI i.e., UGI and Snam SpA go up and down completely randomly.
Pair Corralation between UGI and Snam SpA
Considering the 90-day investment horizon UGI Corporation is expected to under-perform the Snam SpA. In addition to that, UGI is 1.58 times more volatile than Snam SpA ADR. It trades about -0.01 of its total potential returns per unit of risk. Snam SpA ADR is currently generating about 0.01 per unit of volatility. If you would invest 874.00 in Snam SpA ADR on September 19, 2024 and sell it today you would earn a total of 22.00 from holding Snam SpA ADR or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UGI Corp. vs. Snam SpA ADR
Performance |
| Timeline |
| UGI Corporation |
| Snam SpA ADR |
UGI and Snam SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UGI and Snam SpA
The main advantage of trading using opposite UGI and Snam SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGI position performs unexpectedly, Snam SpA 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 Snam SpA will offset losses from the drop in Snam SpA's long position.| UGI vs. NiSource | UGI vs. Aquagold International | UGI vs. Thrivent High Yield | UGI vs. Morningstar Unconstrained Allocation |
| Snam SpA vs. NiSource | Snam SpA vs. NewJersey Resources | Snam SpA vs. Northwest Natural Gas | Snam SpA vs. UGI Corporation |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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