Correlation Between Consol Energy and Reunion Industries
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Reunion Industries 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 Reunion Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Reunion Industries, you can compare the effects of market volatilities on Consol Energy and Reunion Industries 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 Reunion Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Reunion Industries.
Diversification Opportunities for Consol Energy and Reunion Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consol and Reunion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Reunion Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reunion Industries 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 Reunion Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reunion Industries has no effect on the direction of Consol Energy i.e., Consol Energy and Reunion Industries go up and down completely randomly.
Pair Corralation between Consol Energy and Reunion Industries
If you would invest 6,814 in Consol Energy on September 4, 2024 and sell it today you would earn a total of 5,970 from holding Consol Energy or generate 87.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 3.64% |
| Values | Daily Returns |
Consol Energy vs. Reunion Industries
Performance |
| Timeline |
| Consol Energy |
| Reunion Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Consol Energy and Reunion Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Reunion Industries
The main advantage of trading using opposite Consol Energy and Reunion Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Reunion Industries 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 Reunion Industries will offset losses from the drop in Reunion Industries' long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Reunion Industries vs. Hooker Furniture | Reunion Industries vs. Cardinal Health | Reunion Industries vs. Asbury Automotive Group | Reunion Industries vs. Getty Realty |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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