Correlation Between Peel Mining and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Globe Metals 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 Globe Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Globe Metals Mining, you can compare the effects of market volatilities on Peel Mining and Globe Metals 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 Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Globe Metals.
Diversification Opportunities for Peel Mining and Globe Metals
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Peel and Globe is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining 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 Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Peel Mining i.e., Peel Mining and Globe Metals go up and down completely randomly.
Pair Corralation between Peel Mining and Globe Metals
Assuming the 90 days trading horizon Peel Mining is expected to under-perform the Globe Metals. But the stock apears to be less risky and, when comparing its historical volatility, Peel Mining is 2.75 times less risky than Globe Metals. The stock trades about -0.23 of its potential returns per unit of risk. The Globe Metals Mining is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Globe Metals Mining on October 23, 2024 and sell it today you would lose (0.20) from holding Globe Metals Mining or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Peel Mining vs. Globe Metals Mining
Performance |
| Timeline |
| Peel Mining |
| Globe Metals Mining |
Peel Mining and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Globe Metals
The main advantage of trading using opposite Peel Mining and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Globe Metals 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 Globe Metals will offset losses from the drop in Globe Metals' long position.| Peel Mining vs. Queste Communications | Peel Mining vs. Kkr Credit Income | Peel Mining vs. Saferoads Holdings | Peel Mining vs. Insurance Australia Group |
| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. De Grey Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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