Correlation Between Peabody Energy and Alpha Metallurgical

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Peabody Energy and Alpha Metallurgical 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 Peabody Energy and Alpha Metallurgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peabody Energy Corp and Alpha Metallurgical Resources, you can compare the effects of market volatilities on Peabody Energy and Alpha Metallurgical 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 Peabody Energy with a short position of Alpha Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peabody Energy and Alpha Metallurgical.

Diversification Opportunities for Peabody Energy and Alpha Metallurgical

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Peabody and Alpha is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Peabody Energy Corp and Alpha Metallurgical Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Metallurgical and Peabody 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 Peabody Energy Corp are associated (or correlated) with Alpha Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Metallurgical has no effect on the direction of Peabody Energy i.e., Peabody Energy and Alpha Metallurgical go up and down completely randomly.

Pair Corralation between Peabody Energy and Alpha Metallurgical

Considering the 90-day investment horizon Peabody Energy Corp is expected to generate 1.22 times more return on investment than Alpha Metallurgical. However, Peabody Energy is 1.22 times more volatile than Alpha Metallurgical Resources. It trades about 0.04 of its potential returns per unit of risk. Alpha Metallurgical Resources is currently generating about -0.08 per unit of risk. If you would invest  2,437  in Peabody Energy Corp on July 1, 2022 and sell it today you would earn a total of  48.00  from holding Peabody Energy Corp or generate 1.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Peabody Energy Corp  vs.  Alpha Metallurgical Resources

 Performance (%) 
       Timeline  
Peabody Energy Corp 
Peabody Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Peabody Energy Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish basic indicators, Peabody Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Peabody Price Channel

Alpha Metallurgical 
Alpha Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Metallurgical Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting primary indicators, Alpha Metallurgical reported solid returns over the last few months and may actually be approaching a breakup point.

Alpha Price Channel

Peabody Energy and Alpha Metallurgical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Peabody Energy and Alpha Metallurgical

The main advantage of trading using opposite Peabody Energy and Alpha Metallurgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peabody Energy position performs unexpectedly, Alpha Metallurgical 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 Alpha Metallurgical will offset losses from the drop in Alpha Metallurgical's long position.
Peabody Energy vs. Vroom Inc
The idea behind Peabody Energy Corp and Alpha Metallurgical Resources 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.
Alpha Metallurgical vs. Amazon Inc
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go