Volatility and natural gas
The volatility and price movement study of natural gas (UGAZ) futures show that whenever prices rose, it’s a good exit point for energy investors. A rise in volatility indicates the expectation of sharp movement in prices either upward or downward. Near January in 2015 and 2016, volatility rose sharply because a lot of news-related data impacted its prices. The following graph shows the natural gas price movement and its 30-day volatility.
Natural gas tracking ETF
The United States Natural Gas Fund (UNG) also exhibited the same trend. Volatility was sharp in first three months of 2015 and 2016. It outlines the importance of the end of the winter season. It shows the levels of stockpiles left over at the end of the heating season.