Correlation Between Magnolia Oil and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Magnolia Oil 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 Magnolia Oil and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnolia Oil Gas and CNX Resources Corp, you can compare the effects of market volatilities on Magnolia Oil 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 Magnolia Oil with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnolia Oil and CNX Resources.
Diversification Opportunities for Magnolia Oil and CNX Resources
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnolia and CNX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Magnolia Oil Gas 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 Magnolia Oil 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 Magnolia Oil Gas 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 Magnolia Oil i.e., Magnolia Oil and CNX Resources go up and down completely randomly.
Pair Corralation between Magnolia Oil and CNX Resources
Considering the 90-day investment horizon Magnolia Oil is expected to generate 3.5 times less return on investment than CNX Resources. In addition to that, Magnolia Oil is 1.02 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 0.08 per unit of volatility. If you would invest 1,478 in CNX Resources Corp on November 9, 2024 and sell it today you would earn a total of 1,439 from holding CNX Resources Corp or generate 97.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnolia Oil Gas vs. CNX Resources Corp
Performance |
| Timeline |
| Magnolia Oil Gas |
| CNX Resources Corp |
Magnolia Oil and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnolia Oil and CNX Resources
The main advantage of trading using opposite Magnolia Oil and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnolia Oil 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.| Magnolia Oil vs. SM Energy Co | Magnolia Oil vs. Civitas Resources | Magnolia Oil vs. Range Resources Corp | Magnolia Oil vs. Matador Resources |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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