Correlation Between Bendigo and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Bendigo 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 Bendigo and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bendigo And Adelaide and Peel Mining, you can compare the effects of market volatilities on Bendigo 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 Bendigo with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Peel Mining.
Diversification Opportunities for Bendigo and Peel Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bendigo and Peel is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo And Adelaide and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and Bendigo 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 Bendigo And Adelaide 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 Bendigo i.e., Bendigo and Peel Mining go up and down completely randomly.
Pair Corralation between Bendigo and Peel Mining
Assuming the 90 days trading horizon Bendigo And Adelaide is expected to generate 0.23 times more return on investment than Peel Mining. However, Bendigo And Adelaide is 4.31 times less risky than Peel Mining. It trades about 0.08 of its potential returns per unit of risk. Peel Mining is currently generating about 0.01 per unit of risk. If you would invest 870.00 in Bendigo And Adelaide on September 26, 2024 and sell it today you would earn a total of 448.00 from holding Bendigo And Adelaide or generate 51.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Bendigo And Adelaide vs. Peel Mining
Performance |
Timeline |
Bendigo And Adelaide |
Peel Mining |
Bendigo and Peel Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bendigo and Peel Mining
The main advantage of trading using opposite Bendigo and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo 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.Bendigo vs. Westpac Banking | Bendigo vs. Ecofibre | Bendigo vs. iShares Global Healthcare | Bendigo vs. Australian Dairy Farms |
Peel Mining vs. Northern Star Resources | Peel Mining vs. Evolution Mining | Peel Mining vs. Bluescope Steel | Peel Mining vs. Aneka Tambang Tbk |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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