Correlation Between EON Resources and CNX Resources

Can any of the company-specific risk be diversified away by investing in both EON 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 EON 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 EON Resources and CNX Resources Corp, you can compare the effects of market volatilities on EON 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 EON Resources with a short position of CNX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON Resources and CNX Resources.

Diversification Opportunities for EON Resources and CNX Resources

-0.45

Correlation Coefficient

EON Resources  CNX Resources

Very good diversification

The 3 months correlation between EON and CNX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding EON 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 EON 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 EON 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 EON Resources i.e., EON Resources and CNX Resources go up and down completely randomly.

Pair Corralation between EON Resources and CNX Resources

Given the investment horizon of 90 days EON Resources is expected to under-perform the CNX Resources. In addition to that, EON Resources is 8.18 times more volatile than CNX Resources Corp. It trades about 0.0 of its total potential returns per unit of risk. CNX Resources Corp is currently generating about 0.31 per unit of volatility. If you would invest  2,712  in CNX Resources Corp on September 2, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

EON Resources  vs.  CNX Resources Corp

EON Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, EON Resources is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with EON Resources and CNX Resources

The main advantage of trading using opposite EON Resources and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON 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.

The idea behind EON Resources 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.