Correlation Between United States and DCNG
Can any of the company-specific risk be diversified away by investing in both United States and DCNG 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 United States and DCNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Natural and DCNG, you can compare the effects of market volatilities on United States and DCNG 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 United States with a short position of DCNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and DCNG.
Diversification Opportunities for United States and DCNG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and DCNG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United States Natural and DCNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCNG and United States 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 United States Natural are associated (or correlated) with DCNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCNG has no effect on the direction of United States i.e., United States and DCNG go up and down completely randomly.
Pair Corralation between United States and DCNG
If you would invest (100.00) in DCNG on January 20, 2024 and sell it today you would earn a total of 100.00 from holding DCNG or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
United States Natural vs. DCNG
Performance |
| Timeline |
| United States Natural |
| DCNG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United States and DCNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and DCNG
The main advantage of trading using opposite United States and DCNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, DCNG 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 DCNG will offset losses from the drop in DCNG's long position.| United States vs. United States Oil | United States vs. ProShares Ultra Bloomberg | United States vs. Invesco DB Agriculture | United States vs. VanEck Gold Miners |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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