Correlation Between Peak Resources and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Peak Resources and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Peak Resources and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and AIR PRODCHEMICALS.
Diversification Opportunities for Peak Resources and AIR PRODCHEMICALS
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and AIR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Peak Resources i.e., Peak Resources and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Peak Resources and AIR PRODCHEMICALS
Assuming the 90 days horizon Peak Resources Limited is expected to generate 10.04 times more return on investment than AIR PRODCHEMICALS. However, Peak Resources is 10.04 times more volatile than AIR PRODCHEMICALS. It trades about 0.1 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.13 per unit of risk. 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Peak Resources |
| AIR PRODCHEMICALS |
Peak Resources and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and AIR PRODCHEMICALS
The main advantage of trading using opposite Peak Resources and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Peak Resources vs. NEWELL RUBBERMAID | Peak Resources vs. The Yokohama Rubber | Peak Resources vs. Hyster Yale Materials Handling | Peak Resources vs. Park Hotels Resorts |
| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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