Correlation Between Consol Energy and Primo Brands
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Primo Brands 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 Primo Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Primo Brands, you can compare the effects of market volatilities on Consol Energy and Primo Brands 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 Primo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Primo Brands.
Diversification Opportunities for Consol Energy and Primo Brands
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Consol and Primo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Primo Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primo Brands 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 Primo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primo Brands has no effect on the direction of Consol Energy i.e., Consol Energy and Primo Brands go up and down completely randomly.
Pair Corralation between Consol Energy and Primo Brands
Given the investment horizon of 90 days Consol Energy is expected to generate 6.27 times less return on investment than Primo Brands. In addition to that, Consol Energy is 1.15 times more volatile than Primo Brands. It trades about 0.03 of its total potential returns per unit of risk. Primo Brands is currently generating about 0.22 per unit of volatility. If you would invest 2,139 in Primo Brands on November 2, 2024 and sell it today you would earn a total of 1,183 from holding Primo Brands or generate 55.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.29% |
| Values | Daily Returns |
Consol Energy vs. Primo Brands
Performance |
| Timeline |
| Consol Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Primo Brands |
Consol Energy and Primo Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Primo Brands
The main advantage of trading using opposite Consol Energy and Primo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Primo Brands 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 Primo Brands will offset losses from the drop in Primo Brands' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Primo Brands vs. Kinetik Holdings | Primo Brands vs. Pure Cycle | Primo Brands vs. Allegion PLC | Primo Brands vs. Enel Chile SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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