Correlation Between Consol Energy and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Consol Energy and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Centessa Pharmaceuticals.
Diversification Opportunities for Consol Energy and Centessa Pharmaceuticals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consol and Centessa is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Consol Energy i.e., Consol Energy and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Consol Energy and Centessa Pharmaceuticals
Given the investment horizon of 90 days Consol Energy is expected to generate 3.51 times less return on investment than Centessa Pharmaceuticals. But when comparing it to its historical volatility, Consol Energy is 1.7 times less risky than Centessa Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 645.00 in Centessa Pharmaceuticals PLC on September 4, 2024 and sell it today you would earn a total of 1,067 from holding Centessa Pharmaceuticals PLC or generate 165.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Consol Energy |
| Centessa Pharmaceuticals |
Consol Energy and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Centessa Pharmaceuticals
The main advantage of trading using opposite Consol Energy and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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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