Correlation Between National Fuel and Ecopetrol
Can any of the company-specific risk be diversified away by investing in both National Fuel and Ecopetrol 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 National Fuel and Ecopetrol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Fuel Gas and Ecopetrol SA ADR, you can compare the effects of market volatilities on National Fuel and Ecopetrol 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 National Fuel with a short position of Ecopetrol. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Fuel and Ecopetrol.
Diversification Opportunities for National Fuel and Ecopetrol
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Ecopetrol is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and Ecopetrol SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopetrol SA ADR and National Fuel 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 National Fuel Gas are associated (or correlated) with Ecopetrol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopetrol SA ADR has no effect on the direction of National Fuel i.e., National Fuel and Ecopetrol go up and down completely randomly.
Pair Corralation between National Fuel and Ecopetrol
Considering the 90-day investment horizon National Fuel is expected to generate 2.04 times less return on investment than Ecopetrol. In addition to that, National Fuel is 1.01 times more volatile than Ecopetrol SA ADR. It trades about 0.03 of its total potential returns per unit of risk. Ecopetrol SA ADR is currently generating about 0.06 per unit of volatility. If you would invest 801.00 in Ecopetrol SA ADR on August 24, 2024 and sell it today you would earn a total of 18.00 from holding Ecopetrol SA ADR or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Fuel Gas vs. Ecopetrol SA ADR
Performance |
| Timeline |
| National Fuel Gas |
| Ecopetrol SA ADR |
National Fuel and Ecopetrol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Fuel and Ecopetrol
The main advantage of trading using opposite National Fuel and Ecopetrol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Fuel position performs unexpectedly, Ecopetrol 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 Ecopetrol will offset losses from the drop in Ecopetrol's long position.| National Fuel vs. YPF Sociedad Anonima | National Fuel vs. Eni SpA ADR | National Fuel vs. Ecopetrol SA ADR | National Fuel vs. TotalEnergies SE ADR |
| Ecopetrol vs. Eshallgo Class A | Ecopetrol vs. Amtech Systems | Ecopetrol vs. Gold Fields Ltd | Ecopetrol vs. Aegean Airlines SA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |