Correlation Between Stelar Metals and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Peel Mining 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 Stelar Metals and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Peel Mining, you can compare the effects of market volatilities on Stelar Metals and Peel Mining 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 Stelar Metals with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Peel Mining.
Diversification Opportunities for Stelar Metals and Peel Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stelar and Peel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and Stelar Metals 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 Stelar Metals are associated (or correlated) with Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of Stelar Metals i.e., Stelar Metals and Peel Mining go up and down completely randomly.
Pair Corralation between Stelar Metals and Peel Mining
Assuming the 90 days trading horizon Stelar Metals is expected to generate 0.95 times more return on investment than Peel Mining. However, Stelar Metals is 1.05 times less risky than Peel Mining. It trades about 0.0 of its potential returns per unit of risk. Peel Mining is currently generating about -0.06 per unit of risk. If you would invest 7.00 in Stelar Metals on October 19, 2024 and sell it today you would lose (0.10) from holding Stelar Metals or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Peel Mining
Performance |
| Timeline |
| Stelar Metals |
| Peel Mining |
Stelar Metals and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Peel Mining
The main advantage of trading using opposite Stelar Metals and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| Stelar Metals vs. BlackWall Property Funds | Stelar Metals vs. Premier Investments | Stelar Metals vs. Kip McGrath Education | Stelar Metals vs. Djerriwarrh Investments |
| Peel Mining vs. Actinogen Medical | Peel Mining vs. Insurance Australia Group | Peel Mining vs. Retail Food Group | Peel Mining vs. Gold Road Resources |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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