Correlation Between Peel Mining and Marmota Energy
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Marmota Energy 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 Marmota Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Marmota Energy, you can compare the effects of market volatilities on Peel Mining and Marmota Energy 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 Marmota Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Marmota Energy.
Diversification Opportunities for Peel Mining and Marmota Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peel and Marmota is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Marmota Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marmota Energy 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 Marmota Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marmota Energy has no effect on the direction of Peel Mining i.e., Peel Mining and Marmota Energy go up and down completely randomly.
Pair Corralation between Peel Mining and Marmota Energy
Assuming the 90 days trading horizon Peel Mining is expected to generate 1.02 times less return on investment than Marmota Energy. In addition to that, Peel Mining is 1.22 times more volatile than Marmota Energy. It trades about 0.02 of its total potential returns per unit of risk. Marmota Energy is currently generating about 0.02 per unit of volatility. If you would invest 3.80 in Marmota Energy on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Marmota Energy or generate 0.0% 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. Marmota Energy
Performance |
| Timeline |
| Peel Mining |
| Marmota Energy |
Peel Mining and Marmota Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Marmota Energy
The main advantage of trading using opposite Peel Mining and Marmota Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Marmota Energy 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 Marmota Energy will offset losses from the drop in Marmota Energy's long position.| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. Sandfire Resources NL |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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