Correlation Between STRA Hannoversche and CONSOL Energy
Can any of the company-specific risk be diversified away by investing in both STRA Hannoversche 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 STRA Hannoversche and CONSOL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and CONSOL Energy, you can compare the effects of market volatilities on STRA Hannoversche 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 STRA Hannoversche with a short position of CONSOL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRA Hannoversche and CONSOL Energy.
Diversification Opportunities for STRA Hannoversche and CONSOL Energy
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STRA and CONSOL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and CONSOL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOL Energy and STRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe 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 STRA Hannoversche i.e., STRA Hannoversche and CONSOL Energy go up and down completely randomly.
Pair Corralation between STRA Hannoversche and CONSOL Energy
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to under-perform the CONSOL Energy. In addition to that, STRA Hannoversche is 1.28 times more volatile than CONSOL Energy. It trades about 0.0 of its total potential returns per unit of risk. CONSOL Energy is currently generating about 0.08 per unit of volatility. If you would invest 5,951 in CONSOL Energy on September 12, 2024 and sell it today you would earn a total of 5,079 from holding CONSOL Energy or generate 85.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. CONSOL Energy
Performance |
| Timeline |
| STRA Hannoversche |
| CONSOL Energy |
STRA Hannoversche and CONSOL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRA Hannoversche and CONSOL Energy
The main advantage of trading using opposite STRA Hannoversche and CONSOL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRA Hannoversche 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.| STRA Hannoversche vs. MUTUIONLINE | STRA Hannoversche vs. ON SEMICONDUCTOR | STRA Hannoversche vs. NXP Semiconductors NV | STRA Hannoversche vs. TOREX SEMICONDUCTOR LTD |
| CONSOL Energy vs. Dave Busters Entertainment | CONSOL Energy vs. Platinum Investment Management | CONSOL Energy vs. PT Global Mediacom | CONSOL Energy vs. Tencent Music Entertainment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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