Correlation Between Cardano and National Fuel

Can any of the company-specific risk be diversified away by investing in both Cardano 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 Cardano and National Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and National Fuel Gas, you can compare the effects of market volatilities on Cardano 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 Cardano with a short position of National Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and National Fuel.

Diversification Opportunities for Cardano and National Fuel

-0.52

Correlation Coefficient

Cardano  National Fuel

Excellent diversification

The 3 months correlation between Cardano and National is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cardano 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 Cardano 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 Cardano 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 Cardano i.e., Cardano and National Fuel go up and down completely randomly.

Pair Corralation between Cardano and National Fuel

Assuming the 90 days trading horizon Cardano is expected to under-perform the National Fuel. In addition to that, Cardano is 4.59 times more volatile than National Fuel Gas. It trades about -0.02 of its total potential returns per unit of risk. National Fuel Gas is currently generating about 0.24 per unit of volatility. If you would invest  5,700  in National Fuel Gas on December 22, 2024 and sell it today you would earn a total of  1,550  from holding National Fuel Gas or generate 27.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Cardano  vs.  National Fuel Gas

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

National Fuel Gas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Fuel Gas are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, National Fuel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardano and National Fuel

The main advantage of trading using opposite Cardano and National Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano 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.

The idea behind Cardano and National Fuel Gas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.