Correlation Between OD6 Metals and Peel Mining
Can any of the company-specific risk be diversified away by investing in both OD6 Metals 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 OD6 Metals and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OD6 Metals and Peel Mining, you can compare the effects of market volatilities on OD6 Metals 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 OD6 Metals with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of OD6 Metals and Peel Mining.
Diversification Opportunities for OD6 Metals and Peel Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OD6 and Peel is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding OD6 Metals and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and OD6 Metals 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 OD6 Metals 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 has no effect on the direction of OD6 Metals i.e., OD6 Metals and Peel Mining go up and down completely randomly.
Pair Corralation between OD6 Metals and Peel Mining
Assuming the 90 days trading horizon OD6 Metals is expected to under-perform the Peel Mining. In addition to that, OD6 Metals is 1.64 times more volatile than Peel Mining. It trades about -0.36 of its total potential returns per unit of risk. Peel Mining is currently generating about -0.11 per unit of volatility. If you would invest 13.00 in Peel Mining on September 3, 2024 and sell it today you would lose (1.00) from holding Peel Mining or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OD6 Metals vs. Peel Mining
Performance |
| Timeline |
| OD6 Metals |
| Peel Mining |
OD6 Metals and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OD6 Metals and Peel Mining
The main advantage of trading using opposite OD6 Metals and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OD6 Metals 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.| OD6 Metals vs. Northern Star Resources | OD6 Metals vs. Evolution Mining | OD6 Metals vs. Bluescope Steel | OD6 Metals vs. Aneka Tambang Tbk |
| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. Aneka Tambang Tbk |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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