Correlation Between National Fuel and PetroChina
Can any of the company-specific risk be diversified away by investing in both National Fuel and PetroChina 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 PetroChina 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 PetroChina Co Ltd, you can compare the effects of market volatilities on National Fuel and PetroChina 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 PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Fuel and PetroChina.
Diversification Opportunities for National Fuel and PetroChina
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and PetroChina is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina 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 PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of National Fuel i.e., National Fuel and PetroChina go up and down completely randomly.
Pair Corralation between National Fuel and PetroChina
Considering the 90-day investment horizon National Fuel Gas is expected to generate 0.5 times more return on investment than PetroChina. However, National Fuel Gas is 1.98 times less risky than PetroChina. It trades about 0.08 of its potential returns per unit of risk. PetroChina Co Ltd is currently generating about -0.09 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Fuel Gas vs. PetroChina Co Ltd
Performance |
| Timeline |
| National Fuel Gas |
| PetroChina |
National Fuel and PetroChina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Fuel and PetroChina
The main advantage of trading using opposite National Fuel and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Fuel position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina'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 |
| PetroChina vs. Equinor ASA | PetroChina vs. Origin Energy Ltd | PetroChina vs. Shell PLC | PetroChina vs. Eni SpA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |