Correlation Between Barrel Energy and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Barrel Energy and CNX Resources 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 Barrel Energy and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrel Energy and CNX Resources Corp, you can compare the effects of market volatilities on Barrel Energy and CNX Resources 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 Barrel Energy with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrel Energy and CNX Resources.
Diversification Opportunities for Barrel Energy and CNX Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrel and CNX is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barrel Energy and CNX Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNX Resources Corp and Barrel 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 Barrel Energy are associated (or correlated) with CNX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNX Resources Corp has no effect on the direction of Barrel Energy i.e., Barrel Energy and CNX Resources go up and down completely randomly.
Pair Corralation between Barrel Energy and CNX Resources
Given the investment horizon of 90 days Barrel Energy is expected to generate 8.25 times more return on investment than CNX Resources. However, Barrel Energy is 8.25 times more volatile than CNX Resources Corp. It trades about 0.03 of its potential returns per unit of risk. CNX Resources Corp is currently generating about 0.17 per unit of risk. If you would invest 1.00 in Barrel Energy on September 4, 2024 and sell it today you would lose (0.77) from holding Barrel Energy or give up 77.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Barrel Energy vs. CNX Resources Corp
Performance |
| Timeline |
| Barrel Energy |
| CNX Resources Corp |
Barrel Energy and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrel Energy and CNX Resources
The main advantage of trading using opposite Barrel Energy and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrel Energy position performs unexpectedly, CNX Resources 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 CNX Resources will offset losses from the drop in CNX Resources' long position.| Barrel Energy vs. Saturn Oil Gas | Barrel Energy vs. Foothills Exploration | Barrel Energy vs. Calima Energy Limited | Barrel Energy vs. New Frontier Energy |
| CNX Resources vs. Evolution Petroleum | CNX Resources vs. Ring Energy | CNX Resources vs. Gran Tierra Energy | CNX Resources vs. PEDEVCO Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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