Correlation Between Consol Energy and Mill City
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Mill City 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 Mill City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Mill City Ventures, you can compare the effects of market volatilities on Consol Energy and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Mill City.
Diversification Opportunities for Consol Energy and Mill City
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consol and Mill is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Consol Energy i.e., Consol Energy and Mill City go up and down completely randomly.
Pair Corralation between Consol Energy and Mill City
Given the investment horizon of 90 days Consol Energy is expected to generate 0.91 times more return on investment than Mill City. However, Consol Energy is 1.1 times less risky than Mill City. It trades about 0.31 of its potential returns per unit of risk. Mill City Ventures is currently generating about -0.18 per unit of risk. If you would invest 10,913 in Consol Energy on August 28, 2024 and sell it today you would earn a total of 2,420 from holding Consol Energy or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. Mill City Ventures
Performance |
| Timeline |
| Consol Energy |
| Mill City Ventures |
Consol Energy and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Mill City
The main advantage of trading using opposite Consol Energy and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City'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 |
| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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