Correlation Between TKO Group and Consol Energy
Can any of the company-specific risk be diversified away by investing in both TKO Group 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 TKO Group and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKO Group Holdings, and Consol Energy, you can compare the effects of market volatilities on TKO Group 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 TKO Group with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKO Group and Consol Energy.
Diversification Opportunities for TKO Group and Consol Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TKO and Consol is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding TKO Group Holdings, and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and TKO Group 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 TKO Group Holdings, 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 TKO Group i.e., TKO Group and Consol Energy go up and down completely randomly.
Pair Corralation between TKO Group and Consol Energy
Considering the 90-day investment horizon TKO Group Holdings, is expected to generate 0.96 times more return on investment than Consol Energy. However, TKO Group Holdings, is 1.04 times less risky than Consol Energy. It trades about 0.48 of its potential returns per unit of risk. Consol Energy is currently generating about -0.12 per unit of risk. If you would invest 11,780 in TKO Group Holdings, on September 14, 2024 and sell it today you would earn a total of 2,563 from holding TKO Group Holdings, or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKO Group Holdings, vs. Consol Energy
Performance |
| Timeline |
| TKO Group Holdings, |
| Consol Energy |
TKO Group and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKO Group and Consol Energy
The main advantage of trading using opposite TKO Group and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKO Group 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.| TKO Group vs. Ambev SA ADR | TKO Group vs. Willscot Mobile Mini | TKO Group vs. Westrock Coffee | TKO Group vs. Herc Holdings |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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