Correlation Between CONSOL Energy and China Coal
Can any of the company-specific risk be diversified away by investing in both CONSOL Energy and China Coal 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 CONSOL Energy and China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONSOL Energy and China Coal Energy, you can compare the effects of market volatilities on CONSOL Energy and China Coal 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 CONSOL Energy with a short position of China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSOL Energy and China Coal.
Diversification Opportunities for CONSOL Energy and China Coal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CONSOL and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CONSOL Energy and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy and CONSOL 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 CONSOL Energy are associated (or correlated) with China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of CONSOL Energy i.e., CONSOL Energy and China Coal go up and down completely randomly.
Pair Corralation between CONSOL Energy and China Coal
Assuming the 90 days horizon CONSOL Energy is expected to under-perform the China Coal. But the stock apears to be less risky and, when comparing its historical volatility, CONSOL Energy is 1.16 times less risky than China Coal. The stock trades about -0.13 of its potential returns per unit of risk. The China Coal Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 112.00 in China Coal Energy on September 12, 2024 and sell it today you would earn a total of 4.00 from holding China Coal Energy or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONSOL Energy vs. China Coal Energy
Performance |
| Timeline |
| CONSOL Energy |
| China Coal Energy |
CONSOL Energy and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONSOL Energy and China Coal
The main advantage of trading using opposite CONSOL Energy and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSOL Energy position performs unexpectedly, China Coal 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 China Coal will offset losses from the drop in China Coal's long position.| CONSOL Energy vs. Dave Busters Entertainment | CONSOL Energy vs. Platinum Investment Management | CONSOL Energy vs. PT Global Mediacom | CONSOL Energy vs. Tencent Music Entertainment |
| China Coal vs. MagnaChip Semiconductor Corp | China Coal vs. MOLSON RS BEVERAGE | China Coal vs. Tower Semiconductor | China Coal vs. Ebro Foods SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |