Correlation Between Consol Energy and Alpha Metallurgical

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Can any of the company-specific risk be diversified away by investing in both Consol 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 Consol 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 Consol Energy and Alpha Metallurgical Resources, you can compare the effects of market volatilities on Consol 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 Consol Energy with a short position of Alpha Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Alpha Metallurgical.

Diversification Opportunities for Consol Energy and Alpha Metallurgical

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Consol and Alpha is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Alpha Metallurgical Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Metallurgical 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 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 Consol Energy i.e., Consol Energy and Alpha Metallurgical go up and down completely randomly.

Pair Corralation between Consol Energy and Alpha Metallurgical

Given the investment horizon of 90 days Consol Energy is expected to generate 1.03 times less return on investment than Alpha Metallurgical. But when comparing it to its historical volatility, Consol Energy is 1.07 times less risky than Alpha Metallurgical. It trades about 0.14 of its potential returns per unit of risk. Alpha Metallurgical Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  816.00  in Alpha Metallurgical Resources on June 29, 2022 and sell it today you would earn a total of  10,974  from holding Alpha Metallurgical Resources or generate 1344.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Consol Energy  vs.  Alpha Metallurgical Resources

 Performance (%) 
       Timeline  
Consol Energy 
Consol Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Consol Energy are ranked lower than 5 (%) 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.

Consol Price Channel

Alpha Metallurgical 
Alpha Performance
0 of 100
Over the last 90 days Alpha Metallurgical Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Alpha Price Channel

Consol Energy and Alpha Metallurgical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Consol Energy and Alpha Metallurgical

The main advantage of trading using opposite Consol Energy and Alpha Metallurgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol 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.
Consol Energy vs. Kibush Capital Corp
The idea behind Consol Energy 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. Sunrun 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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