Correlation Between XRP and CNX Resources
Can any of the company-specific risk be diversified away by investing in both XRP 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 XRP and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and CNX Resources Corp, you can compare the effects of market volatilities on XRP 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 XRP with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and CNX Resources.
Diversification Opportunities for XRP and CNX Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between XRP and CNX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding XRP 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 XRP 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 XRP 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 XRP i.e., XRP and CNX Resources go up and down completely randomly.
Pair Corralation between XRP and CNX Resources
Assuming the 90 days trading horizon XRP is expected to generate 1.73 times more return on investment than CNX Resources. However, XRP is 1.73 times more volatile than CNX Resources Corp. It trades about 0.32 of its potential returns per unit of risk. CNX Resources Corp is currently generating about -0.22 per unit of risk. If you would invest 228.00 in XRP on October 20, 2024 and sell it today you would earn a total of 101.00 from holding XRP or generate 44.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
XRP vs. CNX Resources Corp
Performance |
| Timeline |
| XRP |
| CNX Resources Corp |
XRP and CNX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and CNX Resources
The main advantage of trading using opposite XRP and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP 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.The idea behind XRP and CNX Resources Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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