Correlation Between National Fuel and Petrogress

Can any of the company-specific risk be diversified away by investing in both National Fuel and Petrogress 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 Petrogress 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 Petrogress, you can compare the effects of market volatilities on National Fuel and Petrogress 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 Petrogress. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Fuel and Petrogress.

Diversification Opportunities for National Fuel and Petrogress

0.0

Correlation Coefficient

National Fuel  Petrogress

Pay attention - limited upside

The 3 months correlation between National and Petrogress is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and Petrogress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrogress 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 Petrogress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrogress has no effect on the direction of National Fuel i.e., National Fuel and Petrogress go up and down completely randomly.

Pair Corralation between National Fuel and Petrogress

Considering the 90-day investment horizon National Fuel is expected to generate 7.76 times less return on investment than Petrogress. But when comparing it to its historical volatility, National Fuel Gas is 13.92 times less risky than Petrogress. It trades about 0.07 of its potential returns per unit of risk. Petrogress is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.22  in Petrogress on December 4, 2024 and sell it today you would lose (0.21) from holding Petrogress or give up 95.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.13%
Values	Daily Returns

National Fuel Gas  vs.  Petrogress

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 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, National Fuel reported solid returns over the last few months and may actually be approaching a breakup point.

Petrogress

Risk-Adjusted Performance

Very Weak

Over the last 90 days Petrogress has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Petrogress is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Fuel and Petrogress

The main advantage of trading using opposite National Fuel and Petrogress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Fuel position performs unexpectedly, Petrogress 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 Petrogress will offset losses from the drop in Petrogress' long position.

The idea behind National Fuel Gas and Petrogress 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.