Correlation Between Peak Resources and PREMIER FOODS
Can any of the company-specific risk be diversified away by investing in both Peak Resources and PREMIER FOODS 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 PREMIER FOODS 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 PREMIER FOODS, you can compare the effects of market volatilities on Peak Resources and PREMIER FOODS 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 PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and PREMIER FOODS.
Diversification Opportunities for Peak Resources and PREMIER FOODS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peak and PREMIER is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS 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 PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of Peak Resources i.e., Peak Resources and PREMIER FOODS go up and down completely randomly.
Pair Corralation between Peak Resources and PREMIER FOODS
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the PREMIER FOODS. In addition to that, Peak Resources is 5.15 times more volatile than PREMIER FOODS. It trades about -0.01 of its total potential returns per unit of risk. PREMIER FOODS is currently generating about 0.1 per unit of volatility. If you would invest 122.00 in PREMIER FOODS on September 12, 2024 and sell it today you would earn a total of 104.00 from holding PREMIER FOODS or generate 85.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. PREMIER FOODS
Performance |
| Timeline |
| Peak Resources |
| PREMIER FOODS |
Peak Resources and PREMIER FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and PREMIER FOODS
The main advantage of trading using opposite Peak Resources and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS'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 |
| PREMIER FOODS vs. Japan Asia Investment | PREMIER FOODS vs. CapitaLand Investment Limited | PREMIER FOODS vs. SALESFORCE INC CDR | PREMIER FOODS vs. Apollo Investment Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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