Correlation Between Beach Energy and Jindalee Resources

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

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

Diversification Opportunities for Beach Energy and Jindalee Resources

0.0

Correlation Coefficient

Beach Energy  Jindalee Resources

Pay attention - limited upside

The 3 months correlation between Beach and Jindalee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beach Energy and Jindalee Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindalee Resources and Beach Energy 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 Beach Energy are associated (or correlated) with Jindalee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindalee Resources has no effect on the direction of Beach Energy i.e., Beach Energy and Jindalee Resources go up and down completely randomly.

Pair Corralation between Beach Energy and Jindalee Resources

If you would invest  130.00  in Beach Energy on October 22, 2024 and sell it today you would earn a total of  20.00  from holding Beach Energy or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Beach Energy  vs.  Jindalee Resources

Beach Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Beach Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Beach Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jindalee Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jindalee Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Jindalee Resources is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Beach Energy and Jindalee Resources

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

The idea behind Beach Energy and Jindalee Resources 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.