Correlation Between Peak Resources and Takkt AG
Can any of the company-specific risk be diversified away by investing in both Peak Resources and Takkt AG 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 Takkt AG 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 Takkt AG, you can compare the effects of market volatilities on Peak Resources and Takkt AG 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 Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and Takkt AG.
Diversification Opportunities for Peak Resources and Takkt AG
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peak and Takkt is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG 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 Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of Peak Resources i.e., Peak Resources and Takkt AG go up and down completely randomly.
Pair Corralation between Peak Resources and Takkt AG
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the Takkt AG. In addition to that, Peak Resources is 4.1 times more volatile than Takkt AG. It trades about -0.04 of its total potential returns per unit of risk. Takkt AG is currently generating about -0.07 per unit of volatility. If you would invest 926.00 in Takkt AG on September 12, 2024 and sell it today you would lose (102.00) from holding Takkt AG or give up 11.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Peak Resources Limited vs. Takkt AG
Performance |
| Timeline |
| Peak Resources |
| Takkt AG |
Peak Resources and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and Takkt AG
The main advantage of trading using opposite Peak Resources and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG's long position.| Peak Resources vs. Carsales | Peak Resources vs. SALESFORCE INC CDR | Peak Resources vs. KINGBOARD CHEMICAL | Peak Resources vs. Shin Etsu Chemical Co |
| Takkt AG vs. Harmony Gold Mining | Takkt AG vs. Verizon Communications | Takkt AG vs. Lion One Metals | Takkt AG vs. Gamma Communications plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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