Correlation Between Enagas SA and Tokyo Gas

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

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

Diversification Opportunities for Enagas SA and Tokyo Gas

-0.23

Correlation Coefficient

Enagas SA  Tokyo Gas

Very good diversification

The 3 months correlation between Enagas and Tokyo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Enagas SA and Tokyo Gas CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Gas CoLtd and Enagas SA 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 Enagas SA are associated (or correlated) with Tokyo Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Gas CoLtd has no effect on the direction of Enagas SA i.e., Enagas SA and Tokyo Gas go up and down completely randomly.

Pair Corralation between Enagas SA and Tokyo Gas

If you would invest  3,998  in Tokyo Gas CoLtd on October 6, 2025 and sell it today you would earn a total of  0.00  from holding Tokyo Gas CoLtd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enagas SA  vs.  Tokyo Gas CoLtd

Enagas SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enagas SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Enagas SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tokyo Gas CoLtd

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tokyo Gas CoLtd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tokyo Gas is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Enagas SA and Tokyo Gas

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

The idea behind Enagas SA and Tokyo Gas CoLtd 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.