Correlation Between Comstock Resources and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Comstock Resources and CNX Resources 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 Comstock Resources and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comstock Resources and CNX Resources Corp, you can compare the effects of market volatilities on Comstock Resources and CNX Resources 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 Comstock Resources with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comstock Resources and CNX Resources.
Diversification Opportunities for Comstock Resources and CNX Resources
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Comstock and CNX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Resources and CNX Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNX Resources Corp and Comstock 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 Comstock Resources are associated (or correlated) with CNX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNX Resources Corp has no effect on the direction of Comstock Resources i.e., Comstock Resources and CNX Resources go up and down completely randomly.
Pair Corralation between Comstock Resources and CNX Resources
Considering the 90-day investment horizon Comstock Resources is expected to generate 1.84 times more return on investment than CNX Resources. However, Comstock Resources is 1.84 times more volatile than CNX Resources Corp. It trades about 0.42 of its potential returns per unit of risk. CNX Resources Corp is currently generating about 0.45 per unit of risk. If you would invest 1,156 in Comstock Resources on September 1, 2024 and sell it today you would earn a total of 401.00 from holding Comstock Resources or generate 34.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comstock Resources vs. CNX Resources Corp
Performance |
| Timeline |
| Comstock Resources |
| CNX Resources Corp |
Comstock Resources and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comstock Resources and CNX Resources
The main advantage of trading using opposite Comstock Resources and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Resources position performs unexpectedly, CNX Resources 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 CNX Resources will offset losses from the drop in CNX Resources' long position.| Comstock Resources vs. Range Resources Corp | Comstock Resources vs. Permian Resources | Comstock Resources vs. EQT Corporation | Comstock Resources vs. Vital Energy |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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