Correlation Between Consol Energy and East Africa
Can any of the company-specific risk be diversified away by investing in both Consol Energy and East Africa 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 East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and East Africa Metals, you can compare the effects of market volatilities on Consol Energy and East Africa 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 East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and East Africa.
Diversification Opportunities for Consol Energy and East Africa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consol and East is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals 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 East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Consol Energy i.e., Consol Energy and East Africa go up and down completely randomly.
Pair Corralation between Consol Energy and East Africa
Given the investment horizon of 90 days Consol Energy is expected to generate 27.49 times less return on investment than East Africa. But when comparing it to its historical volatility, Consol Energy is 23.17 times less risky than East Africa. It trades about 0.06 of its potential returns per unit of risk. East Africa Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.89 in East Africa Metals on November 2, 2024 and sell it today you would earn a total of 1.11 from holding East Africa Metals or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Consol Energy vs. East Africa Metals
Performance |
| Timeline |
| Consol Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| East Africa Metals |
Consol Energy and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and East Africa
The main advantage of trading using opposite Consol Energy and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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