Correlation Between One Gas and OPAL Fuels

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

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

Diversification Opportunities for One Gas and OPAL Fuels

-0.78

Correlation Coefficient

One Gas  OPAL Fuels

Pay attention - limited upside

The 3 months correlation between One and OPAL is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding One Gas and OPAL Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPAL Fuels and One Gas 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 One Gas are associated (or correlated) with OPAL Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPAL Fuels has no effect on the direction of One Gas i.e., One Gas and OPAL Fuels go up and down completely randomly.

Pair Corralation between One Gas and OPAL Fuels

Considering the 90-day investment horizon One Gas is expected to generate 0.39 times more return on investment than OPAL Fuels. However, One Gas is 2.59 times less risky than OPAL Fuels. It trades about 0.08 of its potential returns per unit of risk. OPAL Fuels is currently generating about -0.25 per unit of risk. If you would invest  6,929  in One Gas on December 26, 2024 and sell it today you would earn a total of  409.00  from holding One Gas or generate 5.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

One Gas  vs.  OPAL Fuels

One Gas

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in One Gas are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, One Gas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

OPAL Fuels

Risk-Adjusted Performance

Very Weak

Over the last 90 days OPAL Fuels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with One Gas and OPAL Fuels

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

The idea behind One Gas and OPAL Fuels 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.