Correlation Between Consol Energy and TPG Telecom
Can any of the company-specific risk be diversified away by investing in both Consol Energy and TPG Telecom 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 TPG Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and TPG Telecom Limited, you can compare the effects of market volatilities on Consol Energy and TPG Telecom 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 TPG Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and TPG Telecom.
Diversification Opportunities for Consol Energy and TPG Telecom
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Consol and TPG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and TPG Telecom Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Telecom Limited 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 TPG Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Telecom Limited has no effect on the direction of Consol Energy i.e., Consol Energy and TPG Telecom go up and down completely randomly.
Pair Corralation between Consol Energy and TPG Telecom
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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. TPG Telecom Limited
Performance |
| Timeline |
| Consol Energy |
| TPG Telecom Limited |
Consol Energy and TPG Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and TPG Telecom
The main advantage of trading using opposite Consol Energy and TPG Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, TPG Telecom 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 TPG Telecom will offset losses from the drop in TPG Telecom'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 |
| TPG Telecom vs. Cementos Pacasmayo SAA | TPG Telecom vs. Olympic Steel | TPG Telecom vs. Sun Life Financial | TPG Telecom vs. Consol Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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