Correlation Between Delek and CNX Resources
Can any of the company-specific risk be diversified away by investing in both Delek 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 Delek and CNX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delek Group and CNX Resources Corp, you can compare the effects of market volatilities on Delek 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 Delek with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delek and CNX Resources.
Diversification Opportunities for Delek and CNX Resources
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delek and CNX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Delek Group 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 Delek 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 Delek Group 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 Delek i.e., Delek and CNX Resources go up and down completely randomly.
Pair Corralation between Delek and CNX Resources
Assuming the 90 days horizon Delek Group is expected to generate 0.95 times more return on investment than CNX Resources. However, Delek Group is 1.06 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 0.08 per unit of risk. If you would invest 1,182 in Delek Group on September 7, 2024 and sell it today you would earn a total of 128.00 from holding Delek Group or generate 10.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
Delek Group vs. CNX Resources Corp
Performance |
Timeline |
Delek Group |
CNX Resources Corp |
Delek and CNX Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delek and CNX Resources
The main advantage of trading using opposite Delek and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delek 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.Delek vs. Valeura Energy | Delek vs. Gulf Keystone Petroleum | Delek vs. Inpex Corp ADR | Delek vs. Spartan Delta Corp |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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