Correlation Between Emerson Radio and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Consol Energy, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Consol Energy.
Diversification Opportunities for Emerson Radio and Consol Energy
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerson and Consol is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Consol Energy go up and down completely randomly.
Pair Corralation between Emerson Radio and Consol Energy
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Consol Energy. In addition to that, Emerson Radio is 1.55 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 0.22 per unit of volatility. If you would invest 9,552 in Consol Energy on September 3, 2024 and sell it today you would earn a total of 3,518 from holding Consol Energy or generate 36.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Consol Energy
Performance |
| Timeline |
| Emerson Radio |
| Consol Energy |
Emerson Radio and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Consol Energy
The main advantage of trading using opposite Emerson Radio and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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