Correlation Between Peak Resources and AVIS BUDGET
Can any of the company-specific risk be diversified away by investing in both Peak Resources and AVIS BUDGET 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 AVIS BUDGET 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 AVIS BUDGET GROUP, you can compare the effects of market volatilities on Peak Resources and AVIS BUDGET 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 AVIS BUDGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and AVIS BUDGET.
Diversification Opportunities for Peak Resources and AVIS BUDGET
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and AVIS is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and AVIS BUDGET GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIS BUDGET 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 AVIS BUDGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIS BUDGET GROUP has no effect on the direction of Peak Resources i.e., Peak Resources and AVIS BUDGET go up and down completely randomly.
Pair Corralation between Peak Resources and AVIS BUDGET
Assuming the 90 days horizon Peak Resources Limited is expected to generate 2.14 times more return on investment than AVIS BUDGET. However, Peak Resources is 2.14 times more volatile than AVIS BUDGET GROUP. It trades about 0.0 of its potential returns per unit of risk. AVIS BUDGET GROUP is currently generating about -0.02 per unit of risk. If you would invest 24.00 in Peak Resources Limited on September 5, 2024 and sell it today you would lose (17.65) from holding Peak Resources Limited or give up 73.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. AVIS BUDGET GROUP
Performance |
| Timeline |
| Peak Resources |
| AVIS BUDGET GROUP |
Peak Resources and AVIS BUDGET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and AVIS BUDGET
The main advantage of trading using opposite Peak Resources and AVIS BUDGET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, AVIS BUDGET 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 AVIS BUDGET will offset losses from the drop in AVIS BUDGET'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 |
| AVIS BUDGET vs. TOTAL GABON | AVIS BUDGET vs. Walgreens Boots Alliance | AVIS BUDGET 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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