Correlation Between Alphabet and CNX Resources

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

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

Diversification Opportunities for Alphabet and CNX Resources

0.02

Correlation Coefficient

Alphabet  CNX Resources

Significant diversification

The 3 months correlation between Alphabet and CNX is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and CNX Resources go up and down completely randomly.

Pair Corralation between Alphabet and CNX Resources

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the CNX Resources. But the stock apears to be less risky and, when comparing its historical volatility, Alphabet Inc Class C is 1.34 times less risky than CNX Resources. The stock trades about -0.13 of its potential returns per unit of risk. The CNX Resources Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  3,705  in CNX Resources Corp on December 28, 2024 and sell it today you would lose (561.00) from holding CNX Resources Corp or give up 15.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Alphabet Inc Class C  vs.  CNX Resources Corp

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Alphabet and CNX Resources

The main advantage of trading using opposite Alphabet and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.