Correlation Between Peak Resources and Carsales
Can any of the company-specific risk be diversified away by investing in both Peak Resources and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on Peak Resources and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and Carsales.
Diversification Opportunities for Peak Resources and Carsales
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and Carsales is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of Peak Resources i.e., Peak Resources and Carsales go up and down completely randomly.
Pair Corralation between Peak Resources and Carsales
Assuming the 90 days horizon Peak Resources Limited is expected to generate 7.55 times more return on investment than Carsales. However, Peak Resources is 7.55 times more volatile than Carsales. It trades about 0.06 of its potential returns per unit of risk. Carsales is currently generating about -0.15 per unit of risk. If you would invest 6.10 in Peak Resources Limited on September 13, 2024 and sell it today you would earn a total of 0.15 from holding Peak Resources Limited or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. Carsales
Performance |
| Timeline |
| Peak Resources |
| Carsales |
Peak Resources and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and Carsales
The main advantage of trading using opposite Peak Resources and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Peak Resources vs. Carsales | Peak Resources vs. SALESFORCE INC CDR | Peak Resources vs. KINGBOARD CHEMICAL | Peak Resources vs. Shin Etsu Chemical Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |