Correlation Between Trek Resources and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Trek 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 Trek 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 Trek Resources and CNX Resources Corp, you can compare the effects of market volatilities on Trek 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 Trek Resources with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trek Resources and CNX Resources.
Diversification Opportunities for Trek Resources and CNX Resources
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Trek and CNX is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Trek 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 Trek 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 Trek 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 Trek Resources i.e., Trek Resources and CNX Resources go up and down completely randomly.
Pair Corralation between Trek Resources and CNX Resources
Given the investment horizon of 90 days Trek Resources is expected to under-perform the CNX Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Trek Resources is 1.04 times less risky than CNX Resources. The pink sheet trades about -0.09 of its potential returns per unit of risk. The CNX Resources Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,584 in CNX Resources Corp on September 3, 2024 and sell it today you would earn a total of 1,468 from holding CNX Resources Corp or generate 56.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trek Resources vs. CNX Resources Corp
Performance |
| Timeline |
| Trek Resources |
| CNX Resources Corp |
Trek Resources and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trek Resources and CNX Resources
The main advantage of trading using opposite Trek Resources and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trek 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.| Trek Resources vs. CNX Resources Corp | Trek Resources vs. MV Oil Trust | Trek Resources vs. San Juan Basin | Trek Resources vs. VOC Energy Trust |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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