Correlation Between ATHENE and Consol Energy

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

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

Diversification Opportunities for ATHENE and Consol Energy

-0.15

Correlation Coefficient

ATHENE  Consol Energy

Good diversification

The 3 months correlation between ATHENE and Consol is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ATHENE HLDG LTD and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and ATHENE 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 ATHENE HLDG 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 ATHENE i.e., ATHENE and Consol Energy go up and down completely randomly.

Pair Corralation between ATHENE and Consol Energy

Assuming the 90 days trading horizon ATHENE HLDG LTD is expected to under-perform the Consol Energy. But the bond apears to be less risky and, when comparing its historical volatility, ATHENE HLDG LTD is 3.56 times less risky than Consol Energy. The bond trades about 0.0 of its potential returns per unit of risk. The Consol Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,589  in Consol Energy on September 28, 2024 and sell it today you would earn a total of  4,631  from holding Consol Energy or generate 82.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

ATHENE HLDG LTD  vs.  Consol Energy

ATHENE HLDG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATHENE HLDG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ATHENE HLDG LTD investors.

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 ATHENE and Consol Energy

The main advantage of trading using opposite ATHENE and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATHENE 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 ATHENE HLDG 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.