Correlation Between 88 Energy and Tigers Realm
Can any of the company-specific risk be diversified away by investing in both 88 Energy and Tigers Realm 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 88 Energy and Tigers Realm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Tigers Realm Coal, you can compare the effects of market volatilities on 88 Energy and Tigers Realm 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 88 Energy with a short position of Tigers Realm. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Tigers Realm.
Diversification Opportunities for 88 Energy and Tigers Realm
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between 88E and Tigers is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Tigers Realm Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigers Realm Coal and 88 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 88 Energy are associated (or correlated) with Tigers Realm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigers Realm Coal has no effect on the direction of 88 Energy i.e., 88 Energy and Tigers Realm go up and down completely randomly.
Pair Corralation between 88 Energy and Tigers Realm
Assuming the 90 days trading horizon 88 Energy is expected to generate 1.78 times more return on investment than Tigers Realm. However, 88 Energy is 1.78 times more volatile than Tigers Realm Coal. It trades about 0.05 of its potential returns per unit of risk. Tigers Realm Coal is currently generating about 0.03 per unit of risk. If you would invest 0.79 in 88 Energy on August 29, 2024 and sell it today you would lose (0.69) from holding 88 Energy or give up 87.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. Tigers Realm Coal
Performance |
| Timeline |
| 88 Energy |
| Tigers Realm Coal |
88 Energy and Tigers Realm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and Tigers Realm
The main advantage of trading using opposite 88 Energy and Tigers Realm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Tigers Realm 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 Tigers Realm will offset losses from the drop in Tigers Realm's long position.| 88 Energy vs. Autosports Group | 88 Energy vs. Ras Technology Holdings | 88 Energy vs. Diversified United Investment | 88 Energy vs. Navigator Global Investments |
| Tigers Realm vs. Northern Star Resources | Tigers Realm vs. Evolution Mining | Tigers Realm vs. Bluescope Steel | Tigers Realm vs. Sandfire Resources NL |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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