Correlation Between British Amer and Peel Mining
Can any of the company-specific risk be diversified away by investing in both British Amer and Peel Mining 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 British Amer and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Peel Mining, you can compare the effects of market volatilities on British Amer and Peel Mining 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 British Amer with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Peel Mining.
Diversification Opportunities for British Amer and Peel Mining
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between British and Peel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and British Amer 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 Bailador Technology Invest are associated (or correlated) with Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of British Amer i.e., British Amer and Peel Mining go up and down completely randomly.
Pair Corralation between British Amer and Peel Mining
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.3 times more return on investment than Peel Mining. However, Bailador Technology Invest is 3.36 times less risky than Peel Mining. It trades about 0.05 of its potential returns per unit of risk. Peel Mining is currently generating about -0.11 per unit of risk. If you would invest 125.00 in Bailador Technology Invest on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Bailador Technology Invest or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bailador Technology Invest vs. Peel Mining
Performance |
| Timeline |
| Bailador Technology |
| Peel Mining |
British Amer and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Peel Mining
The main advantage of trading using opposite British Amer and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
| Peel Mining vs. Autosports Group | Peel Mining vs. Pioneer Credit | Peel Mining vs. Treasury Wine Estates | Peel Mining vs. Westpac Banking |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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