Correlation Between CNX Resources and Mach Natural
Can any of the company-specific risk be diversified away by investing in both CNX Resources and Mach Natural 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 Mach Natural 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 Mach Natural Resources, you can compare the effects of market volatilities on CNX Resources and Mach Natural 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 Mach Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and Mach Natural.
Diversification Opportunities for CNX Resources and Mach Natural
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CNX and Mach is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources 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 Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of CNX Resources i.e., CNX Resources and Mach Natural go up and down completely randomly.
Pair Corralation between CNX Resources and Mach Natural
Considering the 90-day investment horizon CNX Resources Corp is expected to generate 1.0 times more return on investment than Mach Natural. However, CNX Resources is 1.0 times more volatile than Mach Natural Resources. It trades about 0.16 of its potential returns per unit of risk. Mach Natural Resources is currently generating about 0.03 per unit of risk. If you would invest 2,085 in CNX Resources Corp on August 24, 2024 and sell it today you would earn a total of 1,979 from holding CNX Resources Corp or generate 94.92% 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. Mach Natural Resources
Performance |
| Timeline |
| CNX Resources Corp |
| Mach Natural Resources |
CNX Resources and Mach Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNX Resources and Mach Natural
The main advantage of trading using opposite CNX Resources and Mach Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, Mach Natural 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 Mach Natural will offset losses from the drop in Mach Natural's long position.| CNX Resources vs. Houston American Energy | CNX Resources vs. Mexco Energy | CNX Resources vs. Ring Energy | CNX Resources vs. Permianville Royalty Trust |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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