Correlation Between Natural Gas and Sharkia National

Can any of the company-specific risk be diversified away by investing in both Natural Gas and Sharkia 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 Sharkia 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 Sharkia National Food, you can compare the effects of market volatilities on Natural Gas and Sharkia 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 Sharkia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Sharkia National.

Diversification Opportunities for Natural Gas and Sharkia National

-0.35

Correlation Coefficient

Natural Gas  Sharkia National

Very good diversification

The 3 months correlation between Natural and Sharkia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Sharkia National Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharkia National Food 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 Sharkia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharkia National Food has no effect on the direction of Natural Gas i.e., Natural Gas and Sharkia National go up and down completely randomly.

Pair Corralation between Natural Gas and Sharkia National

Assuming the 90 days trading horizon Natural Gas is expected to generate 2.49 times less return on investment than Sharkia National. But when comparing it to its historical volatility, Natural Gas Mining is 1.02 times less risky than Sharkia National. It trades about 0.06 of its potential returns per unit of risk. Sharkia National Food is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  547.00  in Sharkia National Food on December 24, 2024 and sell it today you would earn a total of  90.00  from holding Sharkia National Food or generate 16.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Natural Gas Mining  vs.  Sharkia National Food

Natural Gas Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Natural Gas Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Natural Gas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sharkia National Food

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sharkia National Food are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Sharkia National reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Natural Gas and Sharkia National

The main advantage of trading using opposite Natural Gas and Sharkia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Sharkia 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 Sharkia National will offset losses from the drop in Sharkia National's long position.

The idea behind Natural Gas Mining and Sharkia National Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.