Correlation Between CNX Resources and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both CNX Resources and Woodside 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 Woodside 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 Woodside Energy Group, you can compare the effects of market volatilities on CNX Resources and Woodside 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 Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and Woodside Energy.
Diversification Opportunities for CNX Resources and Woodside Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNX and Woodside is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and Woodside Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Energy Group 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 Woodside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Energy Group has no effect on the direction of CNX Resources i.e., CNX Resources and Woodside Energy go up and down completely randomly.
Pair Corralation between CNX Resources and Woodside Energy
Considering the 90-day investment horizon CNX Resources Corp is expected to generate 1.32 times more return on investment than Woodside Energy. However, CNX Resources is 1.32 times more volatile than Woodside Energy Group. It trades about 0.38 of its potential returns per unit of risk. Woodside Energy Group is currently generating about 0.07 per unit of risk. If you would invest 3,521 in CNX Resources Corp on August 27, 2024 and sell it today you would earn a total of 588.00 from holding CNX Resources Corp or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNX Resources Corp vs. Woodside Energy Group
Performance |
| Timeline |
| CNX Resources Corp |
| Woodside Energy Group |
CNX Resources and Woodside Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNX Resources and Woodside Energy
The main advantage of trading using opposite CNX Resources and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, Woodside 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 Woodside Energy will offset losses from the drop in Woodside 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 |
| Woodside Energy vs. Devon Energy | Woodside Energy vs. ConocoPhillips | Woodside Energy vs. Occidental Petroleum | Woodside Energy vs. Permian 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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