Correlation Between Mill City and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Mill City 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 Mill City and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and Consol Energy, you can compare the effects of market volatilities on Mill City 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 Mill City with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Consol Energy.
Diversification Opportunities for Mill City and Consol Energy
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mill and Consol is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and Consol Energy go up and down completely randomly.
Pair Corralation between Mill City and Consol Energy
Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Consol Energy. In addition to that, Mill City is 1.1 times more volatile than Consol Energy. It trades about -0.18 of its total potential returns per unit of risk. Consol Energy is currently generating about 0.31 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mill City Ventures vs. Consol Energy
Performance |
| Timeline |
| Mill City Ventures |
| Consol Energy |
Mill City and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and Consol Energy
The main advantage of trading using opposite Mill City and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
| 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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