Correlation Between Coupang LLC and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Coupang LLC 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 Coupang LLC and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and Consol Energy, you can compare the effects of market volatilities on Coupang LLC 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 Coupang LLC with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Consol Energy.
Diversification Opportunities for Coupang LLC and Consol Energy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coupang and Consol is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Coupang LLC 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 Coupang LLC 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 Coupang LLC i.e., Coupang LLC and Consol Energy go up and down completely randomly.
Pair Corralation between Coupang LLC and Consol Energy
Given the investment horizon of 90 days Coupang LLC is expected to under-perform the Consol Energy. In addition to that, Coupang LLC is 1.11 times more volatile than Consol Energy. It trades about -0.03 of its total potential returns per unit of risk. Consol Energy is currently generating about 0.32 per unit of volatility. If you would invest 10,913 in Consol Energy on August 28, 2024 and sell it today you would earn a total of 2,420 from holding Consol Energy or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang LLC vs. Consol Energy
Performance |
| Timeline |
| Coupang LLC |
| Consol Energy |
Coupang LLC and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and Consol Energy
The main advantage of trading using opposite Coupang LLC and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC 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.| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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