Correlation Between Savoy Energy and National Fuel

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

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

Diversification Opportunities for Savoy Energy and National Fuel

0.0

Correlation Coefficient

Savoy Energy  National Fuel

Pay attention - limited upside

The 3 months correlation between Savoy and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Savoy Energy Corp 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 Savoy Energy 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 Savoy Energy Corp 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 Savoy Energy i.e., Savoy Energy and National Fuel go up and down completely randomly.

Pair Corralation between Savoy Energy and National Fuel

If you would invest  5,883  in National Fuel Gas on December 19, 2024 and sell it today you would earn a total of  1,883  from holding National Fuel Gas or generate 32.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Savoy Energy Corp  vs.  National Fuel Gas

Savoy Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Savoy Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Savoy Energy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

National Fuel Gas

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in National Fuel Gas are ranked lower than 33 (%) 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.

Pair Trading with Savoy Energy and National Fuel

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

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.