Correlation Between Consol Energy and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Inflection Point 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 Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Inflection Point Acquisition, you can compare the effects of market volatilities on Consol Energy and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Inflection Point.
Diversification Opportunities for Consol Energy and Inflection Point
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consol and Inflection is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Consol Energy i.e., Consol Energy and Inflection Point go up and down completely randomly.
Pair Corralation between Consol Energy and Inflection Point
Given the investment horizon of 90 days Consol Energy is expected to generate 40.89 times more return on investment than Inflection Point. However, Consol Energy is 40.89 times more volatile than Inflection Point Acquisition. It trades about 0.22 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.22 per unit of risk. If you would invest 10,444 in Consol Energy on August 31, 2024 and sell it today you would earn a total of 2,695 from holding Consol Energy or generate 25.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Consol Energy vs. Inflection Point Acquisition
Performance |
| Timeline |
| Consol Energy |
| Inflection Point Acq |
Consol Energy and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Inflection Point
The main advantage of trading using opposite Consol Energy and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point'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 |
| Inflection Point vs. PowerUp Acquisition Corp | Inflection Point vs. HUMANA INC | Inflection Point vs. Aquagold International | Inflection Point vs. Barloworld Ltd ADR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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