Correlation Between Appia Energy and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Appia Energy 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 Appia Energy and Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appia Energy Corp and Peninsula Energy, you can compare the effects of market volatilities on Appia Energy 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 Appia Energy with a short position of Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appia Energy and Peninsula Energy.
Diversification Opportunities for Appia Energy and Peninsula Energy
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Appia and Peninsula is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Appia Energy Corp and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and Appia 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 Appia Energy Corp 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 Appia Energy i.e., Appia Energy and Peninsula Energy go up and down completely randomly.
Pair Corralation between Appia Energy and Peninsula Energy
Assuming the 90 days horizon Appia Energy Corp is expected to generate 0.81 times more return on investment than Peninsula Energy. However, Appia Energy Corp is 1.24 times less risky than Peninsula Energy. It trades about 0.07 of its potential returns per unit of risk. Peninsula Energy is currently generating about -0.27 per unit of risk. If you would invest 7.00 in Appia Energy Corp on November 27, 2024 and sell it today you would earn a total of 0.31 from holding Appia Energy Corp or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appia Energy Corp vs. Peninsula Energy
Performance |
| Timeline |
| Appia Energy Corp |
| Peninsula Energy |
Appia Energy and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appia Energy and Peninsula Energy
The main advantage of trading using opposite Appia Energy and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appia Energy 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.| Appia Energy vs. Anfield Resources | Appia Energy vs. Purepoint Uranium Group | Appia Energy vs. Bannerman Resources | Appia Energy vs. Standard Uranium |
| Peninsula Energy vs. Deep Yellow | Peninsula Energy vs. Baselode Energy Corp | Peninsula Energy vs. Paladin Energy | Peninsula Energy vs. Elevate Uranium |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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