Correlation Between Peak Resources and ALIOR BANK
Can any of the company-specific risk be diversified away by investing in both Peak Resources and ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK, you can compare the effects of market volatilities on Peak Resources and ALIOR BANK 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 ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and ALIOR BANK.
Diversification Opportunities for Peak Resources and ALIOR BANK
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peak and ALIOR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of Peak Resources i.e., Peak Resources and ALIOR BANK go up and down completely randomly.
Pair Corralation between Peak Resources and ALIOR BANK
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the ALIOR BANK. In addition to that, Peak Resources is 5.15 times more volatile than ALIOR BANK. It trades about -0.09 of its total potential returns per unit of risk. ALIOR BANK is currently generating about 0.1 per unit of volatility. If you would invest 1,984 in ALIOR BANK on September 4, 2024 and sell it today you would earn a total of 108.00 from holding ALIOR BANK or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Peak Resources Limited vs. ALIOR BANK
Performance |
| Timeline |
| Peak Resources |
| ALIOR BANK |
Peak Resources and ALIOR BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and ALIOR BANK
The main advantage of trading using opposite Peak Resources and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.| Peak Resources vs. BHP Group Limited | Peak Resources vs. Rio Tinto Group | Peak Resources vs. Vale SA | Peak Resources vs. Glencore plc |
| ALIOR BANK vs. TOTAL GABON | ALIOR BANK vs. Walgreens Boots Alliance | ALIOR BANK vs. Peak Resources Limited |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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