Correlation Between EHEALTH and CONSOL Energy
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and CONSOL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and CONSOL Energy, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of CONSOL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and CONSOL Energy.
Diversification Opportunities for EHEALTH and CONSOL Energy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EHEALTH and CONSOL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and CONSOL Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOL Energy and EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and CONSOL Energy go up and down completely randomly.
Pair Corralation between EHEALTH and CONSOL Energy
Assuming the 90 days trading horizon EHEALTH is expected to under-perform the CONSOL Energy. In addition to that, EHEALTH is 1.66 times more volatile than CONSOL Energy. It trades about -0.01 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 9,384 in CONSOL Energy on September 4, 2024 and sell it today you would earn a total of 2,951 from holding CONSOL Energy or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. CONSOL Energy
Performance |
| Timeline |
| EHEALTH |
| CONSOL Energy |
EHEALTH and CONSOL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and CONSOL Energy
The main advantage of trading using opposite EHEALTH and CONSOL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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.The idea behind EHEALTH and CONSOL Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |