Correlation Between National Fuel and OMV AG
Can any of the company-specific risk be diversified away by investing in both National Fuel and OMV AG 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 OMV AG 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 OMV AG PK, you can compare the effects of market volatilities on National Fuel and OMV AG 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 OMV AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Fuel and OMV AG.
Diversification Opportunities for National Fuel and OMV AG
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and OMV is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and OMV AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV AG PK 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 OMV AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV AG PK has no effect on the direction of National Fuel i.e., National Fuel and OMV AG go up and down completely randomly.
Pair Corralation between National Fuel and OMV AG
Considering the 90-day investment horizon National Fuel Gas is expected to generate 1.16 times more return on investment than OMV AG. However, National Fuel is 1.16 times more volatile than OMV AG PK. It trades about 0.11 of its potential returns per unit of risk. OMV AG PK is currently generating about -0.08 per unit of risk. If you would invest 5,844 in National Fuel Gas on August 28, 2024 and sell it today you would earn a total of 555.00 from holding National Fuel Gas or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Fuel Gas vs. OMV AG PK
Performance |
| Timeline |
| National Fuel Gas |
| OMV AG PK |
National Fuel and OMV AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Fuel and OMV AG
The main advantage of trading using opposite National Fuel and OMV AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Fuel position performs unexpectedly, OMV AG 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 OMV AG will offset losses from the drop in OMV AG'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 |
| OMV AG vs. Equinor ASA ADR | OMV AG vs. TotalEnergies SE ADR | OMV AG vs. Ecopetrol SA ADR | OMV AG vs. National Fuel Gas |
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.
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