Correlation Between Peak Resources and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Peak Resources and Huntsman Exploration 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 Peak Resources and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peak Resources Limited and Huntsman Exploration, you can compare the effects of market volatilities on Peak Resources and Huntsman Exploration 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 Peak Resources with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and Huntsman Exploration.
Diversification Opportunities for Peak Resources and Huntsman Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and Huntsman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Peak Resources 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 Peak Resources Limited are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Peak Resources i.e., Peak Resources and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Peak Resources and Huntsman Exploration
Assuming the 90 days horizon Peak Resources Limited is expected to generate 1.55 times more return on investment than Huntsman Exploration. However, Peak Resources is 1.55 times more volatile than Huntsman Exploration. It trades about 0.05 of its potential returns per unit of risk. Huntsman Exploration is currently generating about 0.05 per unit of risk. If you would invest 15.00 in Peak Resources Limited on August 29, 2024 and sell it today you would lose (2.00) from holding Peak Resources Limited or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. Huntsman Exploration
Performance |
| Timeline |
| Peak Resources |
| Huntsman Exploration |
Peak Resources and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and Huntsman Exploration
The main advantage of trading using opposite Peak Resources and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Peak Resources vs. Greenland Minerals And | Peak Resources vs. Arizona Lithium Limited | Peak Resources vs. Arafura Resources | Peak Resources vs. Green Technology Metals |
| Huntsman Exploration vs. Rockridge Resources | Huntsman Exploration vs. Ameriwest Lithium | Huntsman Exploration vs. Osisko Metals Incorporated | Huntsman Exploration vs. Volt Lithium Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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