Correlation Between HMS Bergbau and CONSOL Energy
Can any of the company-specific risk be diversified away by investing in both HMS Bergbau 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 HMS Bergbau and CONSOL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMS Bergbau AG and CONSOL Energy, you can compare the effects of market volatilities on HMS Bergbau 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 HMS Bergbau with a short position of CONSOL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMS Bergbau and CONSOL Energy.
Diversification Opportunities for HMS Bergbau and CONSOL Energy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HMS and CONSOL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HMS Bergbau AG and CONSOL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOL Energy and HMS Bergbau 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 HMS Bergbau AG 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 HMS Bergbau i.e., HMS Bergbau and CONSOL Energy go up and down completely randomly.
Pair Corralation between HMS Bergbau and CONSOL Energy
Assuming the 90 days trading horizon HMS Bergbau is expected to generate 1.77 times less return on investment than CONSOL Energy. But when comparing it to its historical volatility, HMS Bergbau AG is 2.46 times less risky than CONSOL Energy. It trades about 0.15 of its potential returns per unit of risk. CONSOL Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,036 in CONSOL Energy on September 3, 2024 and sell it today you would earn a total of 3,299 from holding CONSOL Energy or generate 36.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMS Bergbau AG vs. CONSOL Energy
Performance |
| Timeline |
| HMS Bergbau AG |
| CONSOL Energy |
HMS Bergbau and CONSOL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMS Bergbau and CONSOL Energy
The main advantage of trading using opposite HMS Bergbau and CONSOL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMS Bergbau 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.| HMS Bergbau vs. Natural Health Trends | HMS Bergbau vs. AEGEAN AIRLINES | HMS Bergbau vs. Cardinal Health | HMS Bergbau vs. CeoTronics AG |
| CONSOL Energy vs. DiamondRock Hospitality | CONSOL Energy vs. SHIP HEALTHCARE HLDGINC | CONSOL Energy vs. EHEALTH | CONSOL Energy vs. Sunny Optical Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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