Correlation Between EnQuest PLC and CNX Resources
Can any of the company-specific risk be diversified away by investing in both EnQuest PLC 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 EnQuest PLC and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnQuest PLC and CNX Resources Corp, you can compare the effects of market volatilities on EnQuest PLC 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 EnQuest PLC with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnQuest PLC and CNX Resources.
Diversification Opportunities for EnQuest PLC and CNX Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EnQuest and CNX is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding EnQuest PLC 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 EnQuest PLC 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 EnQuest PLC 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 EnQuest PLC i.e., EnQuest PLC and CNX Resources go up and down completely randomly.
Pair Corralation between EnQuest PLC and CNX Resources
Assuming the 90 days horizon EnQuest PLC is expected to generate 2.16 times less return on investment than CNX Resources. In addition to that, EnQuest PLC is 1.72 times more volatile than CNX Resources Corp. It trades about 0.02 of its total potential returns per unit of risk. CNX Resources Corp is currently generating about 0.07 per unit of volatility. If you would invest 3,505 in CNX Resources Corp on September 12, 2024 and sell it today you would earn a total of 184.00 from holding CNX Resources Corp or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EnQuest PLC vs. CNX Resources Corp
Performance |
| Timeline |
| EnQuest PLC |
| CNX Resources Corp |
EnQuest PLC and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnQuest PLC and CNX Resources
The main advantage of trading using opposite EnQuest PLC and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnQuest PLC 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.| EnQuest PLC vs. Permian Resources | EnQuest PLC vs. Devon Energy | EnQuest PLC vs. EOG Resources | EnQuest PLC vs. Coterra 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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