Correlation Between ENN Energy and Beijing Gas
Can any of the company-specific risk be diversified away by investing in both ENN Energy and Beijing 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 ENN Energy and Beijing Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and Beijing Gas Blue, you can compare the effects of market volatilities on ENN Energy and Beijing 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 ENN Energy with a short position of Beijing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and Beijing Gas.
Diversification Opportunities for ENN Energy and Beijing Gas
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ENN and Beijing is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and Beijing Gas Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Gas Blue and ENN 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 ENN Energy Holdings are associated (or correlated) with Beijing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Gas Blue has no effect on the direction of ENN Energy i.e., ENN Energy and Beijing Gas go up and down completely randomly.
Pair Corralation between ENN Energy and Beijing Gas
Assuming the 90 days horizon ENN Energy Holdings is expected to under-perform the Beijing Gas. But the pink sheet apears to be less risky and, when comparing its historical volatility, ENN Energy Holdings is 16.91 times less risky than Beijing Gas. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Beijing Gas Blue is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.08 in Beijing Gas Blue on August 28, 2024 and sell it today you would lose (4.67) from holding Beijing Gas Blue or give up 91.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.23% |
| Values | Daily Returns |
ENN Energy Holdings vs. Beijing Gas Blue
Performance |
| Timeline |
| ENN Energy Holdings |
| Beijing Gas Blue |
ENN Energy and Beijing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and Beijing Gas
The main advantage of trading using opposite ENN Energy and Beijing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, Beijing 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 Beijing Gas will offset losses from the drop in Beijing Gas' long position.| ENN Energy vs. Beijing Gas Blue | ENN Energy vs. EverGen Infrastructure Corp | ENN Energy vs. OPAL Fuels | ENN Energy vs. APA Group |
| Beijing Gas vs. NewJersey Resources | Beijing Gas vs. Atmos Energy | Beijing Gas vs. UGI Corporation | Beijing Gas vs. Chesapeake Utilities |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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