Correlation Between Croghan Bancshares and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Croghan Bancshares and Consol Energy 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 Croghan Bancshares and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Croghan Bancshares and Consol Energy, you can compare the effects of market volatilities on Croghan Bancshares and Consol Energy 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 Croghan Bancshares with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croghan Bancshares and Consol Energy.
Diversification Opportunities for Croghan Bancshares and Consol Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Croghan and Consol is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Croghan Bancshares and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Croghan Bancshares 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 Croghan Bancshares are associated (or correlated) with Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Croghan Bancshares i.e., Croghan Bancshares and Consol Energy go up and down completely randomly.
Pair Corralation between Croghan Bancshares and Consol Energy
Given the investment horizon of 90 days Croghan Bancshares is expected to generate 0.28 times more return on investment than Consol Energy. However, Croghan Bancshares is 3.54 times less risky than Consol Energy. It trades about 0.12 of its potential returns per unit of risk. Consol Energy is currently generating about -0.24 per unit of risk. If you would invest 4,925 in Croghan Bancshares on September 12, 2024 and sell it today you would earn a total of 72.00 from holding Croghan Bancshares or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Croghan Bancshares vs. Consol Energy
Performance |
| Timeline |
| Croghan Bancshares |
| Consol Energy |
Croghan Bancshares and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Croghan Bancshares and Consol Energy
The main advantage of trading using opposite Croghan Bancshares and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croghan Bancshares position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy's long position.| Croghan Bancshares vs. Lifevantage | Croghan Bancshares vs. Olympic Steel | Croghan Bancshares vs. Magnite | Croghan Bancshares vs. Flexible Solutions International |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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