Correlation Between NEXA RESOURCES and Peel Mining
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and Peel Mining 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 NEXA RESOURCES and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and Peel Mining Limited, you can compare the effects of market volatilities on NEXA RESOURCES and Peel Mining 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 NEXA RESOURCES with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and Peel Mining.
Diversification Opportunities for NEXA RESOURCES and Peel Mining
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NEXA and Peel is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited and NEXA 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 NEXA RESOURCES SA are associated (or correlated) with Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and Peel Mining go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and Peel Mining
Assuming the 90 days horizon NEXA RESOURCES SA is expected to under-perform the Peel Mining. In addition to that, NEXA RESOURCES is 2.85 times more volatile than Peel Mining Limited. It trades about -0.2 of its total potential returns per unit of risk. Peel Mining Limited is currently generating about -0.3 per unit of volatility. If you would invest 6.95 in Peel Mining Limited on October 15, 2024 and sell it today you would lose (0.60) from holding Peel Mining Limited or give up 8.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
NEXA RESOURCES SA vs. Peel Mining Limited
Performance |
| Timeline |
| NEXA RESOURCES SA |
| Peel Mining Limited |
NEXA RESOURCES and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXA RESOURCES and Peel Mining
The main advantage of trading using opposite NEXA RESOURCES and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| NEXA RESOURCES vs. ADRIATIC METALS LS 013355 | NEXA RESOURCES vs. Superior Plus Corp | NEXA RESOURCES vs. NMI Holdings | NEXA RESOURCES vs. SIVERS SEMICONDUCTORS AB |
| Peel Mining vs. Playmates Toys Limited | Peel Mining vs. Easy Software AG | Peel Mining vs. Amkor Technology | Peel Mining vs. Digilife Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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