Correlation Between Natural Gas and Misr National
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Misr National 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 Natural Gas and Misr National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Gas Mining and Misr National Steel, you can compare the effects of market volatilities on Natural Gas and Misr National 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 Natural Gas with a short position of Misr National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Misr National.
Diversification Opportunities for Natural Gas and Misr National
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natural and Misr is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Misr National Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Misr National Steel and Natural Gas 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 Natural Gas Mining are associated (or correlated) with Misr National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Misr National Steel has no effect on the direction of Natural Gas i.e., Natural Gas and Misr National go up and down completely randomly.
Pair Corralation between Natural Gas and Misr National
Assuming the 90 days trading horizon Natural Gas is expected to generate 4.32 times less return on investment than Misr National. In addition to that, Natural Gas is 1.01 times more volatile than Misr National Steel. It trades about 0.02 of its total potential returns per unit of risk. Misr National Steel is currently generating about 0.1 per unit of volatility. If you would invest 128.00 in Misr National Steel on September 23, 2024 and sell it today you would earn a total of 398.00 from holding Misr National Steel or generate 310.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Natural Gas Mining vs. Misr National Steel
Performance |
Timeline |
Natural Gas Mining |
Misr National Steel |
Natural Gas and Misr National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Gas and Misr National
The main advantage of trading using opposite Natural Gas and Misr National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Misr National 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 Misr National will offset losses from the drop in Misr National's long position.Natural Gas vs. Memphis Pharmaceuticals | Natural Gas vs. Paint Chemicals Industries | Natural Gas vs. Egyptians For Investment | Natural Gas vs. Global Telecom Holding |
Misr National vs. Memphis Pharmaceuticals | Misr National vs. Paint Chemicals Industries | Misr National vs. Egyptians For Investment | Misr National vs. Global Telecom Holding |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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