Correlation Between CONSOL Energy and DiamondRock Hospitality
Can any of the company-specific risk be diversified away by investing in both CONSOL Energy and DiamondRock Hospitality 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 DiamondRock Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONSOL Energy and DiamondRock Hospitality, you can compare the effects of market volatilities on CONSOL Energy and DiamondRock Hospitality 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 DiamondRock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSOL Energy and DiamondRock Hospitality.
Diversification Opportunities for CONSOL Energy and DiamondRock Hospitality
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CONSOL and DiamondRock is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CONSOL Energy and DiamondRock Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiamondRock Hospitality 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 DiamondRock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiamondRock Hospitality has no effect on the direction of CONSOL Energy i.e., CONSOL Energy and DiamondRock Hospitality go up and down completely randomly.
Pair Corralation between CONSOL Energy and DiamondRock Hospitality
If you would invest 671.00 in DiamondRock Hospitality on January 16, 2025 and sell it today you would lose (56.00) from holding DiamondRock Hospitality or give up 8.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
CONSOL Energy vs. DiamondRock Hospitality
Performance |
| Timeline |
| CONSOL Energy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| DiamondRock Hospitality |
CONSOL Energy and DiamondRock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONSOL Energy and DiamondRock Hospitality
The main advantage of trading using opposite CONSOL Energy and DiamondRock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSOL Energy position performs unexpectedly, DiamondRock Hospitality 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 DiamondRock Hospitality will offset losses from the drop in DiamondRock Hospitality's long position.| CONSOL Energy vs. MIRAMAR HOTEL INV | CONSOL Energy vs. Sotherly Hotels | CONSOL Energy vs. British American Tobacco | CONSOL Energy vs. Cairo Communication SpA |
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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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