Correlation Between Peel Mining and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Magellan Financial 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 Magellan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining and Magellan Financial Group, you can compare the effects of market volatilities on Peel Mining and Magellan Financial 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 Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Magellan Financial.
Diversification Opportunities for Peel Mining and Magellan Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Peel and Magellan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial 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 Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Peel Mining i.e., Peel Mining and Magellan Financial go up and down completely randomly.
Pair Corralation between Peel Mining and Magellan Financial
Assuming the 90 days trading horizon Peel Mining is expected to generate 1.76 times more return on investment than Magellan Financial. However, Peel Mining is 1.76 times more volatile than Magellan Financial Group. It trades about 0.02 of its potential returns per unit of risk. Magellan Financial Group is currently generating about 0.0 per unit of risk. If you would invest 10.00 in Peel Mining on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Peel Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. Magellan Financial Group
Performance |
| Timeline |
| Peel Mining |
| Magellan Financial |
Peel Mining and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and Magellan Financial
The main advantage of trading using opposite Peel Mining and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial's long position.| Peel Mining vs. Catalyst Metals | Peel Mining vs. Evolution Mining | Peel Mining vs. Group 6 Metals | Peel Mining vs. Perseus Mining |
| Magellan Financial vs. Clime Investment Management | Magellan Financial vs. Commonwealth Bank of | Magellan Financial vs. K2 Asset Management | Magellan Financial vs. COG Financial Services |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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