Correlation Between New HopeLtd and Consol Energy
Can any of the company-specific risk be diversified away by investing in both New HopeLtd 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 HopeLtd 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 Hope and Consol Energy, you can compare the effects of market volatilities on New HopeLtd 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 HopeLtd with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New HopeLtd and Consol Energy.
Diversification Opportunities for New HopeLtd and Consol Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Consol is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding New Hope and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and New HopeLtd 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 Hope 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 HopeLtd i.e., New HopeLtd and Consol Energy go up and down completely randomly.
Pair Corralation between New HopeLtd and Consol Energy
Assuming the 90 days horizon New HopeLtd is expected to generate 1.16 times less return on investment than Consol Energy. In addition to that, New HopeLtd is 2.77 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 0.08 per unit of volatility. If you would invest 10,523 in Consol Energy on September 1, 2024 and sell it today you would earn a total of 2,547 from holding Consol Energy or generate 24.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope vs. Consol Energy
Performance |
| Timeline |
| New HopeLtd |
| Consol Energy |
New HopeLtd and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New HopeLtd and Consol Energy
The main advantage of trading using opposite New HopeLtd and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New HopeLtd 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 HopeLtd vs. Whitehaven Coal Limited | New HopeLtd vs. Adaro Energy Tbk | New HopeLtd vs. Thungela Resources Limited | New HopeLtd vs. Yanzhou Coal Mining |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |