Correlation Between MP Materials and CN Energy
Can any of the company-specific risk be diversified away by investing in both MP Materials and CN Energy 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 MP Materials and CN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MP Materials Corp and CN Energy Group, you can compare the effects of market volatilities on MP Materials and CN Energy 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 MP Materials with a short position of CN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MP Materials and CN Energy.
Diversification Opportunities for MP Materials and CN Energy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MP Materials and CNEY is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MP Materials Corp and CN Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN Energy Group and MP Materials 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 MP Materials Corp are associated (or correlated) with CN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN Energy Group has no effect on the direction of MP Materials i.e., MP Materials and CN Energy go up and down completely randomly.
Pair Corralation between MP Materials and CN Energy
Allowing for the 90-day total investment horizon MP Materials Corp is expected to generate 1.03 times more return on investment than CN Energy. However, MP Materials is 1.03 times more volatile than CN Energy Group. It trades about 0.19 of its potential returns per unit of risk. CN Energy Group is currently generating about -0.05 per unit of risk. If you would invest 6,026 in MP Materials Corp on July 17, 2025 and sell it today you would earn a total of 3,839 from holding MP Materials Corp or generate 63.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MP Materials Corp vs. CN Energy Group
Performance |
| Timeline |
| MP Materials Corp |
| CN Energy Group |
MP Materials and CN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MP Materials and CN Energy
The main advantage of trading using opposite MP Materials and CN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MP Materials position performs unexpectedly, CN Energy 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 CN Energy will offset losses from the drop in CN Energy's long position.| MP Materials vs. Sigma Lithium Resources | MP Materials vs. Standard Lithium | MP Materials vs. Vale SA ADR | MP Materials vs. Rio Tinto ADR |
| CN Energy vs. Baosheng Media Group | CN Energy vs. Connect Biopharma Holdings | CN Energy vs. Coroware | CN Energy vs. Crown Electrokinetics Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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