Correlation Between Homeland Resources and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Homeland 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 Homeland 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 Homeland Resources and CNX Resources Corp, you can compare the effects of market volatilities on Homeland 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 Homeland Resources with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeland Resources and CNX Resources.
Diversification Opportunities for Homeland Resources and CNX Resources
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Homeland and CNX is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Homeland 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 Homeland 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 Homeland 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 Homeland Resources i.e., Homeland Resources and CNX Resources go up and down completely randomly.
Pair Corralation between Homeland Resources and CNX Resources
Given the investment horizon of 90 days Homeland Resources is expected to generate 15.22 times more return on investment than CNX Resources. However, Homeland Resources is 15.22 times more volatile than CNX Resources Corp. It trades about 0.09 of its potential returns per unit of risk. CNX Resources Corp is currently generating about 0.1 per unit of risk. If you would invest 0.21 in Homeland Resources on September 12, 2024 and sell it today you would lose (0.19) from holding Homeland Resources or give up 90.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.13% |
| Values | Daily Returns |
Homeland Resources vs. CNX Resources Corp
Performance |
| Timeline |
| Homeland Resources |
| CNX Resources Corp |
Homeland Resources and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeland Resources and CNX Resources
The main advantage of trading using opposite Homeland Resources and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeland 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.| Homeland Resources vs. Permian Resources | Homeland Resources vs. Devon Energy | Homeland Resources vs. EOG Resources | Homeland Resources 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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