Correlation Between Grayscale Digital and NATIONAL

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Can any of the company-specific risk be diversified away by investing in both Grayscale Digital and NATIONAL 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 Grayscale Digital and NATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Digital Large and NATIONAL FUEL GAS, you can compare the effects of market volatilities on Grayscale Digital and NATIONAL 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 Grayscale Digital with a short position of NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Digital and NATIONAL.

Diversification Opportunities for Grayscale Digital and NATIONAL

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Grayscale and NATIONAL is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Digital Large 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 Grayscale Digital 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 Grayscale Digital Large are associated (or correlated) with NATIONAL. 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 Grayscale Digital i.e., Grayscale Digital and NATIONAL go up and down completely randomly.

Pair Corralation between Grayscale Digital and NATIONAL

Given the investment horizon of 90 days Grayscale Digital Large is expected to generate 28.29 times more return on investment than NATIONAL. However, Grayscale Digital is 28.29 times more volatile than NATIONAL FUEL GAS. It trades about 0.37 of its potential returns per unit of risk. NATIONAL FUEL GAS is currently generating about -0.01 per unit of risk. If you would invest  2,315  in Grayscale Digital Large on August 16, 2024 and sell it today you would earn a total of  1,416  from holding Grayscale Digital Large or generate 61.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Grayscale Digital Large  vs.  NATIONAL FUEL GAS

 Performance 
       Timeline  
Grayscale Digital Large 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Digital Large are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Grayscale Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.
NATIONAL FUEL GAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NATIONAL FUEL GAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NATIONAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grayscale Digital and NATIONAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grayscale Digital and NATIONAL

The main advantage of trading using opposite Grayscale Digital and NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Digital position performs unexpectedly, NATIONAL 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 will offset losses from the drop in NATIONAL's long position.
The idea behind Grayscale Digital Large 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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