Correlation Between CNX Resources and Vitesse Energy
Can any of the company-specific risk be diversified away by investing in both CNX Resources and Vitesse 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 Vitesse 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 Vitesse Energy, you can compare the effects of market volatilities on CNX Resources and Vitesse 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 Vitesse Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and Vitesse Energy.
Diversification Opportunities for CNX Resources and Vitesse Energy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CNX and Vitesse is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and Vitesse Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitesse 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 Vitesse Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitesse Energy has no effect on the direction of CNX Resources i.e., CNX Resources and Vitesse Energy go up and down completely randomly.
Pair Corralation between CNX Resources and Vitesse Energy
Considering the 90-day investment horizon CNX Resources Corp is expected to generate 1.55 times more return on investment than Vitesse Energy. However, CNX Resources is 1.55 times more volatile than Vitesse Energy. It trades about 0.25 of its potential returns per unit of risk. Vitesse Energy is currently generating about 0.38 per unit of risk. If you would invest 3,585 in CNX Resources Corp on August 24, 2024 and sell it today you would earn a total of 479.00 from holding CNX Resources Corp or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNX Resources Corp vs. Vitesse Energy
Performance |
| Timeline |
| CNX Resources Corp |
| Vitesse Energy |
CNX Resources and Vitesse Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNX Resources and Vitesse Energy
The main advantage of trading using opposite CNX Resources and Vitesse Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, Vitesse 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 Vitesse Energy will offset losses from the drop in Vitesse Energy'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 |
| Vitesse Energy vs. Kimbell Royalty Partners | Vitesse Energy vs. Dorchester Minerals LP | Vitesse Energy vs. Sitio Royalties Corp | Vitesse Energy vs. Coterra Energy |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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