Correlation Between Peak Resources and MIE HOLDINGS

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Can any of the company-specific risk be diversified away by investing in both Peak Resources and MIE HOLDINGS 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 Peak Resources and MIE HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peak Resources Limited and MIE HOLDINGS, you can compare the effects of market volatilities on Peak Resources and MIE HOLDINGS 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 Peak Resources with a short position of MIE HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and MIE HOLDINGS.

Diversification Opportunities for Peak Resources and MIE HOLDINGS

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Peak and MIE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and MIE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIE HOLDINGS and Peak Resources 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 Peak Resources Limited are associated (or correlated) with MIE HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIE HOLDINGS has no effect on the direction of Peak Resources i.e., Peak Resources and MIE HOLDINGS go up and down completely randomly.

Pair Corralation between Peak Resources and MIE HOLDINGS

If you would invest  5.80  in Peak Resources Limited on September 12, 2024 and sell it today you would earn a total of  0.70  from holding Peak Resources Limited or generate 12.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Peak Resources Limited  vs.  MIE HOLDINGS

 Performance 
       Timeline  
Peak Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Peak Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
MIE HOLDINGS 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MIE HOLDINGS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, MIE HOLDINGS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Peak Resources and MIE HOLDINGS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Peak Resources and MIE HOLDINGS

The main advantage of trading using opposite Peak Resources and MIE HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, MIE HOLDINGS 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 MIE HOLDINGS will offset losses from the drop in MIE HOLDINGS's long position.
The idea behind Peak Resources Limited and MIE HOLDINGS 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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