Correlation Between CNX Resources and APA
Can any of the company-specific risk be diversified away by investing in both CNX Resources and APA 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 CNX Resources and APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNX Resources Corp and APA Corporation, you can compare the effects of market volatilities on CNX Resources and APA 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 CNX Resources with a short position of APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and APA.
Diversification Opportunities for CNX Resources and APA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNX and APA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and APA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Corporation and CNX 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 CNX Resources Corp are associated (or correlated) with APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Corporation has no effect on the direction of CNX Resources i.e., CNX Resources and APA go up and down completely randomly.
Pair Corralation between CNX Resources and APA
Considering the 90-day investment horizon CNX Resources Corp is expected to generate 0.77 times more return on investment than APA. However, CNX Resources Corp is 1.29 times less risky than APA. It trades about 0.11 of its potential returns per unit of risk. APA Corporation is currently generating about -0.04 per unit of risk. If you would invest 1,620 in CNX Resources Corp on August 27, 2024 and sell it today you would earn a total of 2,489 from holding CNX Resources Corp or generate 153.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNX Resources Corp vs. APA Corp.
Performance |
| Timeline |
| CNX Resources Corp |
| APA Corporation |
CNX Resources and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNX Resources and APA
The main advantage of trading using opposite CNX Resources and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.| CNX Resources vs. Epsilon Energy | CNX Resources vs. Gulfport Energy Operating | CNX Resources vs. GeoPark | CNX Resources vs. MV Oil Trust |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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