Correlation Between Consol Energy and Trio Petroleum
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Trio Petroleum 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 Trio Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Trio Petroleum Corp, you can compare the effects of market volatilities on Consol Energy and Trio Petroleum 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 Trio Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Trio Petroleum.
Diversification Opportunities for Consol Energy and Trio Petroleum
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consol and Trio is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Trio Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Petroleum Corp 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 Trio Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Petroleum Corp has no effect on the direction of Consol Energy i.e., Consol Energy and Trio Petroleum go up and down completely randomly.
Pair Corralation between Consol Energy and Trio Petroleum
Given the investment horizon of 90 days Consol Energy is expected to generate 0.37 times more return on investment than Trio Petroleum. However, Consol Energy is 2.73 times less risky than Trio Petroleum. It trades about 0.27 of its potential returns per unit of risk. Trio Petroleum Corp is currently generating about -0.39 per unit of risk. If you would invest 11,070 in Consol Energy on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Consol Energy or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. Trio Petroleum Corp
Performance |
| Timeline |
| Consol Energy |
| Trio Petroleum Corp |
Consol Energy and Trio Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Trio Petroleum
The main advantage of trading using opposite Consol Energy and Trio Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Trio Petroleum 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 Trio Petroleum will offset losses from the drop in Trio Petroleum's long position.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Trio Petroleum vs. SkyWest | Trio Petroleum vs. Delta Air Lines | Trio Petroleum vs. Consol Energy | Trio Petroleum vs. Stepan Company |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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