Correlation Between Rational Special and CONSOLIDATED

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

By analyzing existing cross correlation between Rational Special Situations and CONSOLIDATED EDISON N, you can compare the effects of market volatilities on Rational Special and CONSOLIDATED 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 Rational Special with a short position of CONSOLIDATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Special and CONSOLIDATED.

Diversification Opportunities for Rational Special and CONSOLIDATED

-0.18

Correlation Coefficient

Rational Special  CONSOLIDATED

Good diversification

The 3 months correlation between Rational and CONSOLIDATED is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Rational Special Situations and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON and Rational Special 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 Rational Special Situations are associated (or correlated) with CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Rational Special i.e., Rational Special and CONSOLIDATED go up and down completely randomly.

Pair Corralation between Rational Special and CONSOLIDATED

Assuming the 90 days horizon Rational Special is expected to generate 11.99 times less return on investment than CONSOLIDATED. But when comparing it to its historical volatility, Rational Special Situations is 6.6 times less risky than CONSOLIDATED. It trades about 0.09 of its potential returns per unit of risk. CONSOLIDATED EDISON N is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  8,339  in CONSOLIDATED EDISON N on May 16, 2025 and sell it today you would earn a total of  572.00  from holding CONSOLIDATED EDISON N or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.61%
Values	Daily Returns

Rational Special Situations  vs.  CONSOLIDATED EDISON N

Rational Special Sit

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Special Situations are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rational Special is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CONSOLIDATED EDISON

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED EDISON N are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CONSOLIDATED may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Rational Special and CONSOLIDATED

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

The idea behind Rational Special Situations and CONSOLIDATED EDISON N 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 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..