Correlation Between Peel Mining and L1 Long
Can any of the company-specific risk be diversified away by investing in both Peel Mining and L1 Long 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 L1 Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and L1 Long Short, you can compare the effects of market volatilities on Peel Mining and L1 Long 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 L1 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and L1 Long.
Diversification Opportunities for Peel Mining and L1 Long
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Peel and LSF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and L1 Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L1 Long Short 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 L1 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L1 Long Short has no effect on the direction of Peel Mining i.e., Peel Mining and L1 Long go up and down completely randomly.
Pair Corralation between Peel Mining and L1 Long
Assuming the 90 days trading horizon Peel Mining is expected to under-perform the L1 Long. In addition to that, Peel Mining is 1.69 times more volatile than L1 Long Short. It trades about -0.11 of its total potential returns per unit of risk. L1 Long Short is currently generating about -0.05 per unit of volatility. If you would invest 313.00 in L1 Long Short on September 1, 2024 and sell it today you would lose (7.00) from holding L1 Long Short or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. L1 Long Short
Performance |
| Timeline |
| Peel Mining |
| L1 Long Short |
Peel Mining and L1 Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and L1 Long
The main advantage of trading using opposite Peel Mining and L1 Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, L1 Long 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 L1 Long will offset losses from the drop in L1 Long's long position.| Peel Mining vs. Autosports Group | Peel Mining vs. Pioneer Credit | Peel Mining vs. Treasury Wine Estates | Peel Mining vs. Westpac Banking |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |