Correlation Between Algonquin Power and National Fuel
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and National Fuel 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 Algonquin Power and National Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and National Fuel Gas, you can compare the effects of market volatilities on Algonquin Power and National Fuel 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 Algonquin Power with a short position of National Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and National Fuel.
Diversification Opportunities for Algonquin Power and National Fuel
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and National is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and National Fuel Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Fuel Gas and Algonquin Power 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 Algonquin Power Utilities are associated (or correlated) with National Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Fuel Gas has no effect on the direction of Algonquin Power i.e., Algonquin Power and National Fuel go up and down completely randomly.
Pair Corralation between Algonquin Power and National Fuel
Considering the 90-day investment horizon Algonquin Power Utilities is expected to under-perform the National Fuel. In addition to that, Algonquin Power is 1.01 times more volatile than National Fuel Gas. It trades about -0.16 of its total potential returns per unit of risk. National Fuel Gas is currently generating about 0.08 per unit of volatility. If you would invest 6,061 in National Fuel Gas on August 30, 2024 and sell it today you would earn a total of 285.00 from holding National Fuel Gas or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. National Fuel Gas
Performance |
| Timeline |
| Algonquin Power Utilities |
| National Fuel Gas |
Algonquin Power and National Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and National Fuel
The main advantage of trading using opposite Algonquin Power and National Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, National Fuel 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 Fuel will offset losses from the drop in National Fuel's long position.| Algonquin Power vs. Brookfield Renewable Corp | Algonquin Power vs. Nextera Energy Partners | Algonquin Power vs. Clearway Energy Class | Algonquin Power vs. Atlantica Sustainable Infrastructure |
| National Fuel vs. YPF Sociedad Anonima | National Fuel vs. Eni SpA ADR | National Fuel vs. Ecopetrol SA ADR | National Fuel vs. TotalEnergies SE ADR |
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.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |