Correlation Between New Horizon and Consol Energy
Can any of the company-specific risk be diversified away by investing in both New Horizon 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 New Horizon and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Horizon Aircraft and Consol Energy, you can compare the effects of market volatilities on New Horizon 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 New Horizon with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Horizon and Consol Energy.
Diversification Opportunities for New Horizon and Consol Energy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Consol is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding New Horizon Aircraft and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and New Horizon 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 New Horizon Aircraft 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 New Horizon i.e., New Horizon and Consol Energy go up and down completely randomly.
Pair Corralation between New Horizon and Consol Energy
Given the investment horizon of 90 days New Horizon Aircraft is expected to under-perform the Consol Energy. In addition to that, New Horizon is 3.29 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 0.05 per unit of volatility. If you would invest 6,865 in Consol Energy on September 14, 2024 and sell it today you would earn a total of 4,720 from holding Consol Energy or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.46% |
| Values | Daily Returns |
New Horizon Aircraft vs. Consol Energy
Performance |
| Timeline |
| New Horizon Aircraft |
| Consol Energy |
New Horizon and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Horizon and Consol Energy
The main advantage of trading using opposite New Horizon and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Horizon 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.| New Horizon vs. Consol Energy | New Horizon vs. Reservoir Media | New Horizon vs. Apogee Enterprises | New Horizon 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |