Correlation Between Peel Mining and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Clime Investment 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 Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Clime Investment Management, you can compare the effects of market volatilities on Peel Mining and Clime Investment 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 Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Clime Investment.
Diversification Opportunities for Peel Mining and Clime Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peel and Clime is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Peel Mining i.e., Peel Mining and Clime Investment go up and down completely randomly.
Pair Corralation between Peel Mining and Clime Investment
Assuming the 90 days trading horizon Peel Mining is expected to generate 2.21 times more return on investment than Clime Investment. However, Peel Mining is 2.21 times more volatile than Clime Investment Management. It trades about 0.04 of its potential returns per unit of risk. Clime Investment Management is currently generating about 0.05 per unit of risk. If you would invest 11.00 in Peel Mining on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Peel Mining or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. Clime Investment Management
Performance |
| Timeline |
| Peel Mining |
| Clime Investment Man |
Peel Mining and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Clime Investment
The main advantage of trading using opposite Peel Mining and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. De Grey Mining |
| Clime Investment vs. Qbe Insurance Group | Clime Investment vs. Macquarie Bank Limited | Clime Investment vs. Wt Financial Group | Clime Investment vs. oOhMedia |
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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