Correlation Between CNX Resources and North European

Can any of the company-specific risk be diversified away by investing in both CNX Resources and North European 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 CNX Resources and North European into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNX Resources Corp and North European Oil, you can compare the effects of market volatilities on CNX Resources and North European 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 CNX Resources with a short position of North European. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNX Resources and North European.

Diversification Opportunities for CNX Resources and North European

-0.74

Correlation Coefficient

CNX Resources  North European

Pay attention - limited upside

The 3 months correlation between CNX and North is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and North European Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North European Oil and CNX 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 CNX Resources Corp are associated (or correlated) with North European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North European Oil has no effect on the direction of CNX Resources i.e., CNX Resources and North European go up and down completely randomly.

Pair Corralation between CNX Resources and North European

Considering the 90-day investment horizon CNX Resources Corp is expected to generate 0.68 times more return on investment than North European. However, CNX Resources Corp is 1.48 times less risky than North European. It trades about 0.31 of its potential returns per unit of risk. North European Oil is currently generating about -0.12 per unit of risk. If you would invest  2,712  in CNX Resources Corp on September 1, 2024 and sell it today you would earn a total of  1,340  from holding CNX Resources Corp or generate 49.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CNX Resources Corp  vs.  North European Oil

CNX Resources Corp

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CNX Resources Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CNX Resources showed solid returns over the last few months and may actually be approaching a breakup point.

North European Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North European Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CNX Resources and North European

The main advantage of trading using opposite CNX Resources and North European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNX Resources position performs unexpectedly, North European 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 North European will offset losses from the drop in North European's long position.

The idea behind CNX Resources Corp and North European Oil 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.