Correlation Between REMEDY ENTERTAINMENT and Peninsula Energy

Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT and Peninsula 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 REMEDY ENTERTAINMENT and Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and Peninsula Energy Limited, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and Peninsula 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 REMEDY ENTERTAINMENT with a short position of Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and Peninsula Energy.

Diversification Opportunities for REMEDY ENTERTAINMENT and Peninsula Energy

0.31

Correlation Coefficient

REMEDY ENTERTAINMENT  Peninsula Energy

Weak diversification

The 3 months correlation between REMEDY and Peninsula is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and Peninsula Energy go up and down completely randomly.

Pair Corralation between REMEDY ENTERTAINMENT and Peninsula Energy

Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to generate 0.38 times more return on investment than Peninsula Energy. However, REMEDY ENTERTAINMENT OYJ is 2.61 times less risky than Peninsula Energy. It trades about 0.02 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about -0.12 per unit of risk. If you would invest  1,352  in REMEDY ENTERTAINMENT OYJ on December 21, 2024 and sell it today you would earn a total of  18.00  from holding REMEDY ENTERTAINMENT OYJ or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

REMEDY ENTERTAINMENT OYJ  vs.  Peninsula Energy Limited

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REMEDY ENTERTAINMENT OYJ are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, REMEDY ENTERTAINMENT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Peninsula Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peninsula Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with REMEDY ENTERTAINMENT and Peninsula Energy

The main advantage of trading using opposite REMEDY ENTERTAINMENT and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT position performs unexpectedly, Peninsula 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.

The idea behind REMEDY ENTERTAINMENT OYJ and Peninsula Energy Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.