Correlation Between Consol Energy and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both Consol Energy and NioCorp Developments 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 NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and NioCorp Developments Ltd, you can compare the effects of market volatilities on Consol Energy and NioCorp Developments 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 NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and NioCorp Developments.
Diversification Opportunities for Consol Energy and NioCorp Developments
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consol and NioCorp is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Consol Energy i.e., Consol Energy and NioCorp Developments go up and down completely randomly.
Pair Corralation between Consol Energy and NioCorp Developments
Given the investment horizon of 90 days Consol Energy is expected to under-perform the NioCorp Developments. But the stock apears to be less risky and, when comparing its historical volatility, Consol Energy is 1.63 times less risky than NioCorp Developments. The stock trades about -0.12 of its potential returns per unit of risk. The NioCorp Developments Ltd is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 140.00 in NioCorp Developments Ltd on October 21, 2024 and sell it today you would earn a total of 22.00 from holding NioCorp Developments Ltd or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Consol Energy vs. NioCorp Developments Ltd
Performance |
| Timeline |
| Consol Energy |
| NioCorp Developments |
Consol Energy and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and NioCorp Developments
The main advantage of trading using opposite Consol Energy and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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