Correlation Between Consol Energy and INTNED

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

By analyzing existing cross correlation between Consol Energy and INTNED 3875, you can compare the effects of market volatilities on Consol Energy and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and INTNED.

Diversification Opportunities for Consol Energy and INTNED

0.19

Correlation Coefficient

Consol Energy  INTNED

Average diversification

The 3 months correlation between Consol and INTNED is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and INTNED 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 3875 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 3875 has no effect on the direction of Consol Energy i.e., Consol Energy and INTNED go up and down completely randomly.

Pair Corralation between Consol Energy and INTNED

Given the investment horizon of 90 days Consol Energy is expected to under-perform the INTNED. But the stock apears to be less risky and, when comparing its historical volatility, Consol Energy is 3.65 times less risky than INTNED. The stock trades about -0.26 of its potential returns per unit of risk. The INTNED 3875 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  9,012  in INTNED 3875 on September 19, 2024 and sell it today you would lose (579.00) from holding INTNED 3875 or give up 6.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Consol Energy  vs.  INTNED 3875

Consol Energy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Consol Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Consol Energy showed solid returns over the last few months and may actually be approaching a breakup point.

INTNED 3875

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTNED 3875 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, INTNED sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Consol Energy and INTNED

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

The idea behind Consol Energy and INTNED 3875 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.