Correlation Between Ngx Energy and I3 Energy

Can any of the company-specific risk be diversified away by investing in both Ngx Energy and I3 Energy 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 Ngx Energy and I3 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ngx Energy International and I3 Energy Plc, you can compare the effects of market volatilities on Ngx Energy and I3 Energy 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 Ngx Energy with a short position of I3 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngx Energy and I3 Energy.

Diversification Opportunities for Ngx Energy and I3 Energy

-0.2

Correlation Coefficient

Ngx Energy  I3 Energy

Good diversification

The 3 months correlation between Ngx and ITEEF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ngx Energy International and I3 Energy Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I3 Energy Plc and Ngx Energy 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 Ngx Energy International are associated (or correlated) with I3 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I3 Energy Plc has no effect on the direction of Ngx Energy i.e., Ngx Energy and I3 Energy go up and down completely randomly.

Pair Corralation between Ngx Energy and I3 Energy

If you would invest  68.00  in Ngx Energy International on September 12, 2024 and sell it today you would earn a total of  1.00  from holding Ngx Energy International or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Ngx Energy International  vs.  I3 Energy Plc

Ngx Energy International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ngx Energy International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ngx Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

I3 Energy Plc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days I3 Energy Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, I3 Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ngx Energy and I3 Energy

The main advantage of trading using opposite Ngx Energy and I3 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ngx Energy position performs unexpectedly, I3 Energy 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 I3 Energy will offset losses from the drop in I3 Energy's long position.

The idea behind Ngx Energy International and I3 Energy Plc 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.