Correlation Between Consol Energy and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Minerals Technologies, you can compare the effects of market volatilities on Consol Energy and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Minerals Technologies.
Diversification Opportunities for Consol Energy and Minerals Technologies
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Consol and Minerals is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Consol Energy i.e., Consol Energy and Minerals Technologies go up and down completely randomly.
Pair Corralation between Consol Energy and Minerals Technologies
Given the investment horizon of 90 days Consol Energy is expected to generate 1.33 times more return on investment than Minerals Technologies. However, Consol Energy is 1.33 times more volatile than Minerals Technologies. It trades about 0.09 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.02 per unit of risk. If you would invest 10,321 in Consol Energy on August 29, 2024 and sell it today you would earn a total of 2,818 from holding Consol Energy or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. Minerals Technologies
Performance |
| Timeline |
| Consol Energy |
| Minerals Technologies |
Consol Energy and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Minerals Technologies
The main advantage of trading using opposite Consol Energy and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Minerals Technologies vs. Direxion Daily FTSE | Minerals Technologies vs. Collegium Pharmaceutical | Minerals Technologies vs. KKR Co LP | Minerals Technologies vs. iShares Dividend and |
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 Stocks Directory module to find actively traded stocks across global markets.
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