Correlation Between Pinnacle Investment and Boss Energy
Can any of the company-specific risk be diversified away by investing in both Pinnacle Investment and Boss 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 Pinnacle Investment and Boss Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Investment Management and Boss Energy Limited, you can compare the effects of market volatilities on Pinnacle Investment and Boss 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 Pinnacle Investment with a short position of Boss Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Boss Energy.
Diversification Opportunities for Pinnacle Investment and Boss Energy
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pinnacle and Boss is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Boss Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Energy Limited and Pinnacle Investment 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 Pinnacle Investment Management are associated (or correlated) with Boss Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Energy Limited has no effect on the direction of Pinnacle Investment i.e., Pinnacle Investment and Boss Energy go up and down completely randomly.
Pair Corralation between Pinnacle Investment and Boss Energy
Assuming the 90 days trading horizon Pinnacle Investment is expected to generate 4.64 times less return on investment than Boss Energy. But when comparing it to its historical volatility, Pinnacle Investment Management is 1.34 times less risky than Boss Energy. It trades about 0.14 of its potential returns per unit of risk. Boss Energy Limited is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 228.00 in Boss Energy Limited on October 21, 2024 and sell it today you would earn a total of 58.00 from holding Boss Energy Limited or generate 25.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Investment Management vs. Boss Energy Limited
Performance |
| Timeline |
| Pinnacle Investment |
| Boss Energy Limited |
Pinnacle Investment and Boss Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Investment and Boss Energy
The main advantage of trading using opposite Pinnacle Investment and Boss Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment position performs unexpectedly, Boss 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 Boss Energy will offset losses from the drop in Boss Energy's long position.| Pinnacle Investment vs. Queste Communications | Pinnacle Investment vs. IDP Education | Pinnacle Investment vs. Bisalloy Steel Group | Pinnacle Investment vs. The Environmental Group |
| Boss Energy vs. Champion Iron | Boss Energy vs. Vulcan Steel | Boss Energy vs. The Environmental Group | Boss Energy vs. Carawine Resources 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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