Correlation Between Natural Gas and United Bank
Can any of the company-specific risk be diversified away by investing in both Natural Gas and United Bank 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 United Bank 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 The United Bank, you can compare the effects of market volatilities on Natural Gas and United Bank 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 United Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and United Bank.
Diversification Opportunities for Natural Gas and United Bank
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natural and United is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and The United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bank 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 United Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bank has no effect on the direction of Natural Gas i.e., Natural Gas and United Bank go up and down completely randomly.
Pair Corralation between Natural Gas and United Bank
Assuming the 90 days trading horizon Natural Gas Mining is expected to under-perform the United Bank. In addition to that, Natural Gas is 3.32 times more volatile than The United Bank. It trades about -0.01 of its total potential returns per unit of risk. The United Bank is currently generating about 0.05 per unit of volatility. If you would invest 1,429 in The United Bank on October 8, 2024 and sell it today you would earn a total of 8.00 from holding The United Bank or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 93.75% |
Values | Daily Returns |
Natural Gas Mining vs. The United Bank
Performance |
Timeline |
Natural Gas Mining |
United Bank |
Natural Gas and United Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Gas and United Bank
The main advantage of trading using opposite Natural Gas and United Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, United Bank 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 United Bank will offset losses from the drop in United Bank's long position.Natural Gas vs. Paint Chemicals Industries | Natural Gas vs. Reacap Financial Investments | Natural Gas vs. Egyptians For Investment | Natural Gas vs. Misr Oils Soap |
United Bank vs. Cairo For Investment | United Bank vs. Sharkia National Food | United Bank vs. Atlas For Investment | United Bank vs. Al Arafa Investment |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Bonds Directory Find actively traded corporate debentures issued by US companies |