Correlation Between Pacific Gas and AGR Group

Can any of the company-specific risk be diversified away by investing in both Pacific Gas and AGR Group 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 Pacific Gas and AGR Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pacific Gas and and AGR Group ASA, you can compare the effects of market volatilities on Pacific Gas and AGR Group 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 Pacific Gas with a short position of AGR Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Gas and AGR Group.

Diversification Opportunities for Pacific Gas and AGR Group

-0.14

Correlation Coefficient

Pacific Gas  AGR Group

Good diversification

The 3 months correlation between Pacific and AGR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Gas and and AGR Group ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGR Group ASA and Pacific 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 Pacific Gas and are associated (or correlated) with AGR Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGR Group ASA has no effect on the direction of Pacific Gas i.e., Pacific Gas and AGR Group go up and down completely randomly.

Pair Corralation between Pacific Gas and AGR Group

Assuming the 90 days trading horizon Pacific Gas and is expected to under-perform the AGR Group. In addition to that, Pacific Gas is 6.86 times more volatile than AGR Group ASA. It trades about -0.11 of its total potential returns per unit of risk. AGR Group ASA is currently generating about 0.16 per unit of volatility. If you would invest  3,531  in AGR Group ASA on October 25, 2024 and sell it today you would earn a total of  71.00  from holding AGR Group ASA or generate 2.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.27%
Values	Daily Returns

Pacific Gas and  vs.  AGR Group ASA

Pacific Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Gas and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Preferred Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AGR Group ASA

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days AGR Group ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, AGR Group is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pacific Gas and AGR Group

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

The idea behind Pacific Gas and and AGR Group ASA 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.