Correlation Between Peak Resources and Regulus Resources
Can any of the company-specific risk be diversified away by investing in both Peak Resources and Regulus Resources 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 Regulus Resources 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 Regulus Resources, you can compare the effects of market volatilities on Peak Resources and Regulus Resources 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 Regulus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and Regulus Resources.
Diversification Opportunities for Peak Resources and Regulus Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Peak and Regulus is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources 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 Regulus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Resources has no effect on the direction of Peak Resources i.e., Peak Resources and Regulus Resources go up and down completely randomly.
Pair Corralation between Peak Resources and Regulus Resources
Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the Regulus Resources. In addition to that, Peak Resources is 4.79 times more volatile than Regulus Resources. It trades about -0.03 of its total potential returns per unit of risk. Regulus Resources is currently generating about 0.26 per unit of volatility. If you would invest 133.00 in Regulus Resources on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Regulus Resources or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peak Resources Limited vs. Regulus Resources
Performance |
| Timeline |
| Peak Resources |
| Regulus Resources |
Peak Resources and Regulus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Resources and Regulus Resources
The main advantage of trading using opposite Peak Resources and Regulus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Resources position performs unexpectedly, Regulus Resources 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 Regulus Resources will offset losses from the drop in Regulus Resources' 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 |
| Regulus Resources vs. Peak Resources Limited | Regulus Resources vs. Glen Eagle Resources | Regulus Resources vs. Metals Creek Resources | Regulus Resources vs. PepinNini Minerals Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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