Correlation Between LODESTAR MIN and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both LODESTAR MIN and Peninsula 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 LODESTAR MIN and Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LODESTAR MIN and Peninsula Energy Limited, you can compare the effects of market volatilities on LODESTAR MIN and Peninsula 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 LODESTAR MIN with a short position of Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LODESTAR MIN and Peninsula Energy.
Diversification Opportunities for LODESTAR MIN and Peninsula Energy
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LODESTAR and Peninsula is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding LODESTAR MIN and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and LODESTAR MIN 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 LODESTAR MIN are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of LODESTAR MIN i.e., LODESTAR MIN and Peninsula Energy go up and down completely randomly.
Pair Corralation between LODESTAR MIN and Peninsula Energy
If you would invest 67.00 in Peninsula Energy Limited on October 17, 2024 and sell it today you would earn a total of 9.00 from holding Peninsula Energy Limited or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
LODESTAR MIN vs. Peninsula Energy Limited
Performance |
| Timeline |
| LODESTAR MIN |
| Peninsula Energy |
LODESTAR MIN and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LODESTAR MIN and Peninsula Energy
The main advantage of trading using opposite LODESTAR MIN and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LODESTAR MIN position performs unexpectedly, Peninsula 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Rio Tinto Group |
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 the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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