Correlation Between Peel Mining and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both Peel Mining and WAGNERS HOLDING 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 WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining Limited and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on Peel Mining and WAGNERS HOLDING 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 WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and WAGNERS HOLDING.
Diversification Opportunities for Peel Mining and WAGNERS HOLDING
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peel and WAGNERS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining Limited and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD 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 Limited are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of Peel Mining i.e., Peel Mining and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between Peel Mining and WAGNERS HOLDING
Assuming the 90 days horizon Peel Mining Limited is expected to generate 0.74 times more return on investment than WAGNERS HOLDING. However, Peel Mining Limited is 1.35 times less risky than WAGNERS HOLDING. It trades about 0.05 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.0 per unit of risk. If you would invest 6.80 in Peel Mining Limited on September 27, 2024 and sell it today you would earn a total of 0.15 from holding Peel Mining Limited or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peel Mining Limited vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| Peel Mining Limited |
| WAGNERS HOLDING LTD |
Peel Mining and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peel Mining and WAGNERS HOLDING
The main advantage of trading using opposite Peel Mining and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| Peel Mining vs. Rio Tinto Group | Peel Mining vs. Anglo American plc | Peel Mining vs. Liontown Resources Limited | Peel Mining vs. NEXA RESOURCES SA |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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