Correlation Between Brenmiller Energy and Consol Energy

Can any of the company-specific risk be diversified away by investing in both Brenmiller Energy 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 Brenmiller Energy and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brenmiller Energy Ltd and Consol Energy, you can compare the effects of market volatilities on Brenmiller Energy 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 Brenmiller Energy with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brenmiller Energy and Consol Energy.

Diversification Opportunities for Brenmiller Energy and Consol Energy

-0.47

Correlation Coefficient

Brenmiller Energy  Consol Energy

Very good diversification

The 3 months correlation between Brenmiller and Consol is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Brenmiller Energy 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 Brenmiller Energy Ltd 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 Brenmiller Energy i.e., Brenmiller Energy and Consol Energy go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Consol Energy

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to generate 5.38 times more return on investment than Consol Energy. However, Brenmiller Energy is 5.38 times more volatile than Consol Energy. It trades about 0.03 of its potential returns per unit of risk. Consol Energy is currently generating about 0.02 per unit of risk. If you would invest  90.00  in Brenmiller Energy Ltd on September 24, 2024 and sell it today you would lose (14.70) from holding Brenmiller Energy Ltd or give up 16.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Brenmiller Energy Ltd  vs.  Consol Energy

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Consol Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Consol Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Consol Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brenmiller Energy and Consol Energy

The main advantage of trading using opposite Brenmiller Energy and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brenmiller Energy 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 Brenmiller Energy Ltd 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..