Correlation Between MDU Resources and One Gas

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

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

Diversification Opportunities for MDU Resources and One Gas

0.84

Correlation Coefficient

MDU Resources  One Gas

Very poor diversification

The 3 months correlation between MDU and One is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MDU Resources Group and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas and MDU Resources 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 MDU Resources Group are associated (or correlated) with One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of MDU Resources i.e., MDU Resources and One Gas go up and down completely randomly.

Pair Corralation between MDU Resources and One Gas

Considering the 90-day investment horizon MDU Resources Group is expected to generate 1.26 times more return on investment than One Gas. However, MDU Resources is 1.26 times more volatile than One Gas. It trades about 0.28 of its potential returns per unit of risk. One Gas is currently generating about 0.13 per unit of risk. If you would invest  1,624  in MDU Resources Group on August 20, 2025 and sell it today you would earn a total of  420.00  from holding MDU Resources Group or generate 25.86% return on investment over 90 days.

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

MDU Resources Group  vs.  One Gas

MDU Resources Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MDU Resources Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, MDU Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

One Gas

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in One Gas are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, One Gas may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with MDU Resources and One Gas

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

The idea behind MDU Resources Group and One 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.