Correlation Between Peak Resources and SLIGRO FOOD
Can any of the company-specific risk be diversified away by investing in both Peak Resources and SLIGRO FOOD 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 SLIGRO FOOD 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 SLIGRO FOOD GROUP, you can compare the effects of market volatilities on Peak Resources and SLIGRO FOOD 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 SLIGRO FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and SLIGRO FOOD.
Diversification Opportunities for Peak Resources and SLIGRO FOOD
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Peak and SLIGRO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and SLIGRO FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLIGRO FOOD GROUP 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 SLIGRO FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLIGRO FOOD GROUP has no effect on the direction of Peak Resources i.e., Peak Resources and SLIGRO FOOD go up and down completely randomly.
Pair Corralation between Peak Resources and SLIGRO FOOD
Assuming the 90 days horizon Peak Resources Limited is expected to generate 5.56 times more return on investment than SLIGRO FOOD. However, Peak Resources is 5.56 times more volatile than SLIGRO FOOD GROUP. It trades about -0.01 of its potential returns per unit of risk. SLIGRO FOOD GROUP is currently generating about -0.05 per unit of risk. If you would invest 28.00 in Peak Resources Limited on September 13, 2024 and sell it today you would lose (21.75) from holding Peak Resources Limited or give up 77.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. SLIGRO FOOD GROUP
Performance |
| Timeline |
| Peak Resources |
| SLIGRO FOOD GROUP |
Peak Resources and SLIGRO FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and SLIGRO FOOD
The main advantage of trading using opposite Peak Resources and SLIGRO FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, SLIGRO FOOD 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 SLIGRO FOOD will offset losses from the drop in SLIGRO FOOD's long position.| Peak Resources vs. Carsales | Peak Resources vs. SALESFORCE INC CDR | Peak Resources vs. KINGBOARD CHEMICAL | Peak Resources vs. Shin Etsu Chemical Co |
| SLIGRO FOOD vs. Apple Inc | SLIGRO FOOD vs. Apple Inc | SLIGRO FOOD vs. Apple Inc | SLIGRO FOOD vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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