Correlation Between Dominion Energy and National Fuel
Can any of the company-specific risk be diversified away by investing in both Dominion Energy 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 Dominion Energy and National Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominion Energy and National Fuel Gas, you can compare the effects of market volatilities on Dominion Energy 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 Dominion Energy with a short position of National Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominion Energy and National Fuel.
Diversification Opportunities for Dominion Energy and National Fuel
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dominion and National is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dominion Energy 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 Dominion 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 Dominion Energy 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 Dominion Energy i.e., Dominion Energy and National Fuel go up and down completely randomly.
Pair Corralation between Dominion Energy and National Fuel
Taking into account the 90-day investment horizon Dominion Energy is expected to generate 1.11 times more return on investment than National Fuel. However, Dominion Energy is 1.11 times more volatile than National Fuel Gas. It trades about 0.08 of its potential returns per unit of risk. National Fuel Gas is currently generating about 0.09 per unit of risk. If you would invest 4,491 in Dominion Energy on August 27, 2024 and sell it today you would earn a total of 1,323 from holding Dominion Energy or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dominion Energy vs. National Fuel Gas
Performance |
| Timeline |
| Dominion Energy |
| National Fuel Gas |
Dominion Energy and National Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominion Energy and National Fuel
The main advantage of trading using opposite Dominion Energy and National Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominion Energy 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.| Dominion Energy vs. Entergy | Dominion Energy vs. Ameren Corp | Dominion Energy vs. Alliant Energy Corp | Dominion Energy vs. Pinnacle West Capital |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |