Correlation Between NYSE Composite and CNX Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CNX Resources Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CNX Resources.
Diversification Opportunities for NYSE Composite and CNX Resources
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and CNX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and CNX Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and CNX Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.95 times less return on investment than CNX Resources. But when comparing it to its historical volatility, NYSE Composite is 3.23 times less risky than CNX Resources. It trades about 0.26 of its potential returns per unit of risk. CNX Resources Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 3,505 in CNX Resources Corp on August 30, 2024 and sell it today you would earn a total of 529.00 from holding CNX Resources Corp or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. CNX Resources Corp
Performance |
| Timeline |
NYSE Composite and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CNX Resources Corp
Pair trading matchups for CNX Resources
Pair Trading with NYSE Composite and CNX Resources
The main advantage of trading using opposite NYSE Composite and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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