Correlation Between Gran Tierra and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Gran Tierra 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 Gran Tierra and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gran Tierra Energy and CNX Resources Corp, you can compare the effects of market volatilities on Gran Tierra 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 Gran Tierra with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and CNX Resources.
Diversification Opportunities for Gran Tierra and CNX Resources
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gran and CNX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy 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 Gran Tierra 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 Gran Tierra Energy 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 Gran Tierra i.e., Gran Tierra and CNX Resources go up and down completely randomly.
Pair Corralation between Gran Tierra and CNX Resources
Considering the 90-day investment horizon Gran Tierra Energy is expected to generate 1.84 times more return on investment than CNX Resources. However, Gran Tierra is 1.84 times more volatile than CNX Resources Corp. It trades about 0.17 of its potential returns per unit of risk. CNX Resources Corp is currently generating about -0.2 per unit of risk. If you would invest 622.00 in Gran Tierra Energy on September 12, 2024 and sell it today you would earn a total of 68.00 from holding Gran Tierra Energy or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gran Tierra Energy vs. CNX Resources Corp
Performance |
| Timeline |
| Gran Tierra Energy |
| CNX Resources Corp |
Gran Tierra and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gran Tierra and CNX Resources
The main advantage of trading using opposite Gran Tierra and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra 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.| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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