Correlation Between Peel Mining and OD6 Metals
Can any of the company-specific risk be diversified away by investing in both Peel Mining and OD6 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 OD6 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 OD6 Metals, you can compare the effects of market volatilities on Peel Mining and OD6 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 OD6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and OD6 Metals.
Diversification Opportunities for Peel Mining and OD6 Metals
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peel and OD6 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and OD6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OD6 Metals 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 OD6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OD6 Metals has no effect on the direction of Peel Mining i.e., Peel Mining and OD6 Metals go up and down completely randomly.
Pair Corralation between Peel Mining and OD6 Metals
Assuming the 90 days trading horizon Peel Mining is expected to generate 0.61 times more return on investment than OD6 Metals. However, Peel Mining is 1.64 times less risky than OD6 Metals. It trades about -0.11 of its potential returns per unit of risk. OD6 Metals is currently generating about -0.36 per unit of risk. If you would invest 13.00 in Peel Mining on September 3, 2024 and sell it today you would lose (1.00) from holding Peel Mining or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining vs. OD6 Metals
Performance |
| Timeline |
| Peel Mining |
| OD6 Metals |
Peel Mining and OD6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and OD6 Metals
The main advantage of trading using opposite Peel Mining and OD6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, OD6 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 OD6 Metals will offset losses from the drop in OD6 Metals' long position.| Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. Aneka Tambang Tbk |
| OD6 Metals vs. Northern Star Resources | OD6 Metals vs. Evolution Mining | OD6 Metals vs. Bluescope Steel | OD6 Metals vs. Aneka Tambang Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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