Correlation Between CNX Resources and MV Oil

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

Diversification Opportunities for CNX Resources and MV Oil

0.6

Correlation Coefficient

CNX Resources  MV Oil

Poor diversification

The 3 months correlation between CNX and MVO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CNX Resources Corp and MV Oil Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MV Oil Trust 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 MV Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MV Oil Trust has no effect on the direction of CNX Resources i.e., CNX Resources and MV Oil go up and down completely randomly.

Pair Corralation between CNX Resources and MV Oil

Considering the 90-day investment horizon CNX Resources Corp is expected to generate 0.64 times more return on investment than MV Oil. However, CNX Resources Corp is 1.57 times less risky than MV Oil. It trades about -0.08 of its potential returns per unit of risk. MV Oil Trust is currently generating about -0.13 per unit of risk. If you would invest  3,664  in CNX Resources Corp on December 25, 2024 and sell it today you would lose (477.00) from holding CNX Resources Corp or give up 13.02% of portfolio value over 90 days.

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

CNX Resources Corp  vs.  MV Oil Trust

CNX Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNX Resources Corp 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 fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MV Oil Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days MV Oil Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CNX Resources and MV Oil

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

The idea behind CNX Resources Corp and MV Oil Trust 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.