Correlation Between Greenvale Mining and Consol Energy

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

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

Diversification Opportunities for Greenvale Mining and Consol Energy

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Correlation Coefficient

Greenvale Mining  Consol Energy

Pay attention - limited upside

The 3 months correlation between Greenvale and Consol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Greenvale Mining Limited and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and Greenvale Mining 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 Greenvale Mining Limited 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 Greenvale Mining i.e., Greenvale Mining and Consol Energy go up and down completely randomly.

Pair Corralation between Greenvale Mining and Consol Energy

Assuming the 90 days horizon Greenvale Mining Limited is expected to generate 1.69 times more return on investment than Consol Energy. However, Greenvale Mining is 1.69 times more volatile than Consol Energy. It trades about 0.04 of its potential returns per unit of risk. Consol Energy is currently generating about 0.06 per unit of risk. If you would invest  3.00  in Greenvale Mining Limited on October 24, 2024 and sell it today you would earn a total of  2.00  from holding Greenvale Mining Limited or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Greenvale Mining Limited  vs.  Consol Energy

Greenvale Mining

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Greenvale Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Greenvale Mining is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Greenvale Mining and Consol Energy

The main advantage of trading using opposite Greenvale Mining and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenvale Mining 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 Greenvale Mining Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.