Correlation Between ENGIE ADR/1 and National Grid
Can any of the company-specific risk be diversified away by investing in both ENGIE ADR/1 and National Grid 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 ENGIE ADR/1 and National Grid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGIE ADR1 EO and National Grid PLC, you can compare the effects of market volatilities on ENGIE ADR/1 and National Grid 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 ENGIE ADR/1 with a short position of National Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGIE ADR/1 and National Grid.
Diversification Opportunities for ENGIE ADR/1 and National Grid
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ENGIE and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ENGIE ADR1 EO and National Grid PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Grid PLC and ENGIE ADR/1 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 ENGIE ADR1 EO are associated (or correlated) with National Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Grid PLC has no effect on the direction of ENGIE ADR/1 i.e., ENGIE ADR/1 and National Grid go up and down completely randomly.
Pair Corralation between ENGIE ADR/1 and National Grid
If you would invest (100.00) in ENGIE ADR1 EO on October 1, 2024 and sell it today you would earn a total of 100.00 from holding ENGIE ADR1 EO 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 |
ENGIE ADR1 EO vs. National Grid PLC
Performance |
Timeline |
ENGIE ADR1 EO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Grid PLC |
ENGIE ADR/1 and National Grid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ENGIE ADR/1 and National Grid
The main advantage of trading using opposite ENGIE ADR/1 and National Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGIE ADR/1 position performs unexpectedly, National Grid 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 National Grid will offset losses from the drop in National Grid's long position.ENGIE ADR/1 vs. SEI INVESTMENTS | ENGIE ADR/1 vs. FIRST SAVINGS FINL | ENGIE ADR/1 vs. REINET INVESTMENTS SCA | ENGIE ADR/1 vs. PLAYMATES TOYS |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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