Correlation Between CNX Resources and Karoon Energy
Can any of the company-specific risk be diversified away by investing in both CNX Resources and Karoon Energy 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 Karoon Energy 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 Karoon Energy, you can compare the effects of market volatilities on CNX Resources and Karoon Energy 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 Karoon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and Karoon Energy.
Diversification Opportunities for CNX Resources and Karoon Energy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNX and Karoon is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and Karoon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karoon Energy 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 Karoon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karoon Energy has no effect on the direction of CNX Resources i.e., CNX Resources and Karoon Energy go up and down completely randomly.
Pair Corralation between CNX Resources and Karoon Energy
Considering the 90-day investment horizon CNX Resources Corp is expected to generate 0.43 times more return on investment than Karoon Energy. However, CNX Resources Corp is 2.32 times less risky than Karoon Energy. It trades about 0.13 of its potential returns per unit of risk. Karoon Energy is currently generating about 0.01 per unit of risk. If you would invest 1,716 in CNX Resources Corp on September 12, 2024 and sell it today you would earn a total of 1,973 from holding CNX Resources Corp or generate 114.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
CNX Resources Corp vs. Karoon Energy
Performance |
| Timeline |
| CNX Resources Corp |
| Karoon Energy |
CNX Resources and Karoon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNX Resources and Karoon Energy
The main advantage of trading using opposite CNX Resources and Karoon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, Karoon Energy 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 Karoon Energy will offset losses from the drop in Karoon Energy's long position.| CNX Resources vs. Epsilon Energy | CNX Resources vs. Gulfport Energy Operating | CNX Resources vs. GeoPark | CNX Resources vs. MV Oil Trust |
| Karoon Energy vs. VOC Energy Trust | Karoon Energy vs. Dorchester Minerals LP | Karoon Energy vs. Black Stone Minerals | Karoon Energy vs. EOG Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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