Correlation Between Peel Mining and Australia
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Australia 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 Peel Mining and Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Australia and New, you can compare the effects of market volatilities on Peel Mining and Australia 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 Peel Mining with a short position of Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Australia.
Diversification Opportunities for Peel Mining and Australia
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peel and Australia is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New and Peel Mining 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 Peel Mining are associated (or correlated) with Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Peel Mining i.e., Peel Mining and Australia go up and down completely randomly.
Pair Corralation between Peel Mining and Australia
Assuming the 90 days trading horizon Peel Mining is expected to under-perform the Australia. In addition to that, Peel Mining is 2.86 times more volatile than Australia and New. It trades about -0.11 of its total potential returns per unit of risk. Australia and New is currently generating about 0.12 per unit of volatility. If you would invest 3,036 in Australia and New on September 1, 2024 and sell it today you would earn a total of 81.00 from holding Australia and New or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. Australia and New
Performance |
| Timeline |
| Peel Mining |
| Australia and New |
Peel Mining and Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Australia
The main advantage of trading using opposite Peel Mining and Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Australia 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 Australia will offset losses from the drop in Australia's long position.| Peel Mining vs. Autosports Group | Peel Mining vs. Pioneer Credit | Peel Mining vs. Treasury Wine Estates | Peel Mining vs. Westpac Banking |
| Australia vs. Navigator Global Investments | Australia vs. Actinogen Medical | Australia vs. Diversified United Investment | Australia vs. Lendlease Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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