Correlation Between National Fuel and BEST

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

Diversification Opportunities for National Fuel and BEST

-0.44

Correlation Coefficient

National Fuel  BEST

Very good diversification

The 3 months correlation between National and BEST is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding National Fuel Gas and BEST Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEST Inc 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 BEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEST Inc has no effect on the direction of National Fuel i.e., National Fuel and BEST go up and down completely randomly.

Pair Corralation between National Fuel and BEST

Considering the 90-day investment horizon National Fuel Gas is expected to generate 0.44 times more return on investment than BEST. However, National Fuel Gas is 2.27 times less risky than BEST. It trades about 0.18 of its potential returns per unit of risk. BEST Inc is currently generating about -0.05 per unit of risk. If you would invest  5,294  in National Fuel Gas on March 2, 2024 and sell it today you would earn a total of  243.00  from holding National Fuel Gas or generate 4.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

National Fuel Gas  vs.  BEST Inc

National Fuel Gas

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in National Fuel Gas are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, National Fuel may actually be approaching a critical reversion point that can send shares even higher in July 2024.

BEST Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with National Fuel and BEST

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

The idea behind National Fuel Gas and BEST Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..