Correlation Between Peabody Energy and Hallador Energy
Can any of the company-specific risk be diversified away by investing in both Peabody Energy and Hallador 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 Peabody Energy and Hallador Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peabody Energy Corp and Hallador Energy, you can compare the effects of market volatilities on Peabody Energy and Hallador 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 Peabody Energy with a short position of Hallador Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peabody Energy and Hallador Energy.
Diversification Opportunities for Peabody Energy and Hallador Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peabody and Hallador is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Peabody Energy Corp and Hallador Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hallador Energy and Peabody 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 Peabody Energy Corp are associated (or correlated) with Hallador Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hallador Energy has no effect on the direction of Peabody Energy i.e., Peabody Energy and Hallador Energy go up and down completely randomly.
Pair Corralation between Peabody Energy and Hallador Energy
Considering the 90-day investment horizon Peabody Energy is expected to generate 6.51 times less return on investment than Hallador Energy. But when comparing it to its historical volatility, Peabody Energy Corp is 1.76 times less risky than Hallador Energy. It trades about 0.01 of its potential returns per unit of risk. Hallador Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 945.00 in Hallador Energy on August 24, 2024 and sell it today you would earn a total of 346.00 from holding Hallador Energy or generate 36.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peabody Energy Corp vs. Hallador Energy
Performance |
| Timeline |
| Peabody Energy Corp |
| Hallador Energy |
Peabody Energy and Hallador Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peabody Energy and Hallador Energy
The main advantage of trading using opposite Peabody Energy and Hallador Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peabody Energy position performs unexpectedly, Hallador 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 Hallador Energy will offset losses from the drop in Hallador Energy's long position.| Peabody Energy vs. Alliance Resource Partners | Peabody Energy vs. Natural Resource Partners | Peabody Energy vs. Hallador Energy | Peabody Energy vs. NACCO Industries |
| Hallador Energy vs. Natural Resource Partners | Hallador Energy vs. Consol Energy | Hallador Energy vs. Adaro Energy Tbk | Hallador Energy vs. Alliance Resource Partners |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |