Correlation Between Peak Resources and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both Peak Resources and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on Peak Resources and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and DATANG INTL.
Diversification Opportunities for Peak Resources and DATANG INTL
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peak and DATANG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of Peak Resources i.e., Peak Resources and DATANG INTL go up and down completely randomly.
Pair Corralation between Peak Resources and DATANG INTL
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the DATANG INTL. In addition to that, Peak Resources is 4.8 times more volatile than DATANG INTL POW. It trades about -0.09 of its total potential returns per unit of risk. DATANG INTL POW is currently generating about -0.08 per unit of volatility. If you would invest 17.00 in DATANG INTL POW on September 4, 2024 and sell it today you would lose (1.00) from holding DATANG INTL POW or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Peak Resources Limited vs. DATANG INTL POW
Performance |
| Timeline |
| Peak Resources |
| DATANG INTL POW |
Peak Resources and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and DATANG INTL
The main advantage of trading using opposite Peak Resources and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL'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 |
| DATANG INTL vs. Cogent Communications Holdings | DATANG INTL vs. Charter Communications | DATANG INTL vs. WillScot Mobile Mini | DATANG INTL vs. FUYO GENERAL LEASE |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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