Correlation Between Consol Energy and Mannatech Incorporated

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

By analyzing existing cross correlation between Consol Energy and Mannatech Incorporated, you can compare the effects of market volatilities on Consol Energy and Mannatech Incorporated 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 Mannatech Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Mannatech Incorporated.

Diversification Opportunities for Consol Energy and Mannatech Incorporated

0.35

Correlation Coefficient

Consol Energy  Mannatech Incorporated

Weak diversification

The 3 months correlation between Consol and Mannatech is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated 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 Mannatech Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mannatech Incorporated has no effect on the direction of Consol Energy i.e., Consol Energy and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between Consol Energy and Mannatech Incorporated

Given the investment horizon of 90 days Consol Energy is expected to generate 1.95 times less return on investment than Mannatech Incorporated. But when comparing it to its historical volatility, Consol Energy is 1.94 times less risky than Mannatech Incorporated. It trades about 0.13 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  760.00  in Mannatech Incorporated on September 16, 2024 and sell it today you would earn a total of  283.00  from holding Mannatech Incorporated or generate 37.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Consol Energy  vs.  Mannatech Incorporated

Consol Energy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Consol Energy are ranked lower than 10 (%) 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.

Mannatech Incorporated

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Mannatech Incorporated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Consol Energy and Mannatech Incorporated

The main advantage of trading using opposite Consol Energy and Mannatech Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy position performs unexpectedly, Mannatech Incorporated 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 Mannatech Incorporated will offset losses from the drop in Mannatech Incorporated's long position.

The idea behind Consol Energy and Mannatech Incorporated 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.