Correlation Between Hillcrest Energy and CNX Resources

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

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

Diversification Opportunities for Hillcrest Energy and CNX Resources

-0.83

Correlation Coefficient

Hillcrest Energy  CNX Resources

Pay attention - limited upside

The 3 months correlation between Hillcrest and CNX is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hillcrest Energy Technologies 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 Hillcrest Energy 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 Hillcrest Energy Technologies 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 Hillcrest Energy i.e., Hillcrest Energy and CNX Resources go up and down completely randomly.

Pair Corralation between Hillcrest Energy and CNX Resources

Assuming the 90 days horizon Hillcrest Energy Technologies is expected to under-perform the CNX Resources. In addition to that, Hillcrest Energy is 2.85 times more volatile than CNX Resources Corp. It trades about -0.07 of its total potential returns per unit of risk. CNX Resources Corp is currently generating about 0.23 per unit of volatility. If you would invest  2,705  in CNX Resources Corp on September 12, 2024 and sell it today you would earn a total of  984.00  from holding CNX Resources Corp or generate 36.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Hillcrest Energy Technologies  vs.  CNX Resources Corp

Hillcrest Energy Tec

Risk-Adjusted Performance

0 of 100

Very Weak

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

CNX Resources Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CNX Resources Corp are ranked lower than 17 (%) 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 Hillcrest Energy and CNX Resources

The main advantage of trading using opposite Hillcrest Energy and CNX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillcrest Energy 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 Hillcrest Energy Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.