Correlation Between 1248EPCK7 and Consol Energy

Can any of the company-specific risk be diversified away by investing in both 1248EPCK7 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 1248EPCK7 and Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CCO HLDGS LLC and Consol Energy, you can compare the effects of market volatilities on 1248EPCK7 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 1248EPCK7 with a short position of Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1248EPCK7 and Consol Energy.

Diversification Opportunities for 1248EPCK7 and Consol Energy

-0.43

Correlation Coefficient

1248EPCK7  Consol Energy

Very good diversification

The 3 months correlation between 1248EPCK7 and Consol is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CCO HLDGS LLC and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy and 1248EPCK7 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 CCO HLDGS LLC 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 1248EPCK7 i.e., 1248EPCK7 and Consol Energy go up and down completely randomly.

Pair Corralation between 1248EPCK7 and Consol Energy

Assuming the 90 days trading horizon CCO HLDGS LLC is expected to under-perform the Consol Energy. But the bond apears to be less risky and, when comparing its historical volatility, CCO HLDGS LLC is 1.65 times less risky than Consol Energy. The bond trades about -0.08 of its potential returns per unit of risk. The Consol Energy is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  9,446  in Consol Energy on September 4, 2024 and sell it today you would earn a total of  3,338  from holding Consol Energy or generate 35.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

CCO HLDGS LLC  vs.  Consol Energy

CCO HLDGS LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCO HLDGS LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Bond's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for CCO HLDGS LLC shareholders.

Consol Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Consol Energy are ranked lower than 16 (%) 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.

Pair Trading with 1248EPCK7 and Consol Energy

The main advantage of trading using opposite 1248EPCK7 and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1248EPCK7 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 CCO HLDGS LLC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.