Correlation Between National Fuel and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both National Fuel and Equinor ASA 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 Equinor ASA 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 Equinor ASA, you can compare the effects of market volatilities on National Fuel and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Fuel and Equinor ASA.
Diversification Opportunities for National Fuel and Equinor ASA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Equinor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of National Fuel i.e., National Fuel and Equinor ASA go up and down completely randomly.
Pair Corralation between National Fuel and Equinor ASA
Considering the 90-day investment horizon National Fuel is expected to generate 1.06 times less return on investment than Equinor ASA. But when comparing it to its historical volatility, National Fuel Gas is 1.43 times less risky than Equinor ASA. It trades about 0.1 of its potential returns per unit of risk. Equinor ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,352 in Equinor ASA on August 30, 2024 and sell it today you would earn a total of 91.00 from holding Equinor ASA or generate 3.87% 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. Equinor ASA
Performance |
| Timeline |
| National Fuel Gas |
| Equinor ASA |
National Fuel and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Fuel and Equinor ASA
The main advantage of trading using opposite National Fuel and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Fuel position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA'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 |
| Equinor ASA vs. China Petroleum Chemical | Equinor ASA vs. Galp Energa | Equinor ASA vs. Exxon Mobil Corp | Equinor ASA vs. Eni SpA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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