Correlation Between Consol Energy and Portillos
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Portillos 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 Portillos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Portillos, you can compare the effects of market volatilities on Consol Energy and Portillos 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 Portillos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Portillos.
Diversification Opportunities for Consol Energy and Portillos
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Consol and Portillos is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Portillos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portillos 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 Portillos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portillos has no effect on the direction of Consol Energy i.e., Consol Energy and Portillos go up and down completely randomly.
Pair Corralation between Consol Energy and Portillos
Given the investment horizon of 90 days Consol Energy is expected to under-perform the Portillos. But the stock apears to be less risky and, when comparing its historical volatility, Consol Energy is 2.13 times less risky than Portillos. The stock trades about -0.23 of its potential returns per unit of risk. The Portillos is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 898.00 in Portillos on October 20, 2024 and sell it today you would earn a total of 276.00 from holding Portillos or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Consol Energy vs. Portillos
Performance |
| Timeline |
| Consol Energy |
| Portillos |
Consol Energy and Portillos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Portillos
The main advantage of trading using opposite Consol Energy and Portillos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Portillos 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 Portillos will offset losses from the drop in Portillos' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Portillos vs. Brinker International | Portillos vs. Bloomin Brands | Portillos vs. Wingstop | Portillos vs. Papa Johns International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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