Correlation Between Peabody Energy and CEIX Old

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

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

Diversification Opportunities for Peabody Energy and CEIX Old

0.0

Correlation Coefficient

Peabody Energy  CEIX Old

Pay attention - limited upside

The 3 months correlation between Peabody and CEIX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Peabody Energy Corp and CEIX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEIX Old and Peabody 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 Peabody Energy Corp are associated (or correlated) with CEIX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEIX Old has no effect on the direction of Peabody Energy i.e., Peabody Energy and CEIX Old go up and down completely randomly.

Pair Corralation between Peabody Energy and CEIX Old

If you would invest (100.00) in CEIX Old on December 29, 2024 and sell it today you would earn a total of  100.00  from holding CEIX Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Peabody Energy Corp  vs.  CEIX Old

Peabody Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peabody Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CEIX Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CEIX Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, CEIX Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Peabody Energy and CEIX Old

The main advantage of trading using opposite Peabody Energy and CEIX Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peabody Energy position performs unexpectedly, CEIX Old 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 CEIX Old will offset losses from the drop in CEIX Old's long position.

The idea behind Peabody Energy Corp and CEIX Old 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.