Correlation Between Consol Energy and Weyco
Can any of the company-specific risk be diversified away by investing in both Consol Energy and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Weyco Group, you can compare the effects of market volatilities on Consol Energy and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Weyco.
Diversification Opportunities for Consol Energy and Weyco
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Consol and Weyco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Consol Energy i.e., Consol Energy and Weyco go up and down completely randomly.
Pair Corralation between Consol Energy and Weyco
Given the investment horizon of 90 days Consol Energy is expected to generate 0.68 times more return on investment than Weyco. However, Consol Energy is 1.48 times less risky than Weyco. It trades about 0.26 of its potential returns per unit of risk. Weyco Group is currently generating about 0.07 per unit of risk. If you would invest 10,191 in Consol Energy on September 3, 2024 and sell it today you would earn a total of 2,879 from holding Consol Energy or generate 28.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consol Energy vs. Weyco Group
Performance |
| Timeline |
| Consol Energy |
| Weyco Group |
Consol Energy and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Weyco
The main advantage of trading using opposite Consol Energy and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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