Correlation Between Worley Parsons and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Worley Parsons and Natural 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 Worley Parsons and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worley Parsons and Natural Gas Services, you can compare the effects of market volatilities on Worley Parsons and Natural 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 Worley Parsons with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worley Parsons and Natural Gas.
Diversification Opportunities for Worley Parsons and Natural Gas
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Worley and Natural is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Worley Parsons and Natural Gas Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Services and Worley Parsons 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 Worley Parsons are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Services has no effect on the direction of Worley Parsons i.e., Worley Parsons and Natural Gas go up and down completely randomly.
Pair Corralation between Worley Parsons and Natural Gas
Assuming the 90 days horizon Worley Parsons is expected to under-perform the Natural Gas. In addition to that, Worley Parsons is 1.39 times more volatile than Natural Gas Services. It trades about -0.01 of its total potential returns per unit of risk. Natural Gas Services is currently generating about 0.11 per unit of volatility. If you would invest 2,040 in Natural Gas Services on November 2, 2024 and sell it today you would earn a total of 645.00 from holding Natural Gas Services or generate 31.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worley Parsons vs. Natural Gas Services
Performance |
| Timeline |
| Worley Parsons |
| Natural Gas Services |
Worley Parsons and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worley Parsons and Natural Gas
The main advantage of trading using opposite Worley Parsons and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worley Parsons position performs unexpectedly, Natural 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Worley Parsons vs. Petrofac Ltd ADR | Worley Parsons vs. Saipem SpA | Worley Parsons vs. SMG Industries | Worley Parsons vs. Bri Chem Corp |
| Natural Gas vs. Enerflex | Natural Gas vs. Forum Energy Technologies | Natural Gas vs. Archrock | Natural Gas vs. Geospace Technologies |
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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