Correlation Between Consol Energy and Brenmiller Energy

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

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

Diversification Opportunities for Consol Energy and Brenmiller Energy

-0.37

Correlation Coefficient

Consol Energy  Brenmiller Energy

Very good diversification

The 3 months correlation between Consol and Brenmiller is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Consol 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 Consol Energy are associated (or correlated) with Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Consol Energy i.e., Consol Energy and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Consol Energy and Brenmiller Energy

Given the investment horizon of 90 days Consol Energy is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, Consol Energy is 5.99 times less risky than Brenmiller Energy. The stock trades about -0.29 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.6 of returns per unit of risk over similar time horizon. If you would invest  74.00  in Brenmiller Energy Ltd on October 12, 2024 and sell it today you would earn a total of  156.00  from holding Brenmiller Energy Ltd or generate 210.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Consol Energy  vs.  Brenmiller Energy Ltd

Consol Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Consol Energy has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Brenmiller Energy

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Consol Energy and Brenmiller Energy

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

The idea behind Consol Energy and Brenmiller Energy Ltd 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..