Correlation Between Champion Iron and Pengana Private

Can any of the company-specific risk be diversified away by investing in both Champion Iron and Pengana Private 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 Champion Iron and Pengana Private into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Champion Iron and Pengana Private Equity, you can compare the effects of market volatilities on Champion Iron and Pengana Private 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 Champion Iron with a short position of Pengana Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Pengana Private.

Diversification Opportunities for Champion Iron and Pengana Private

0.51

Correlation Coefficient

Champion Iron  Pengana Private

Very weak diversification

The 3 months correlation between Champion and Pengana is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Pengana Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengana Private Equity and Champion Iron 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 Champion Iron are associated (or correlated) with Pengana Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengana Private Equity has no effect on the direction of Champion Iron i.e., Champion Iron and Pengana Private go up and down completely randomly.

Pair Corralation between Champion Iron and Pengana Private

Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Pengana Private. But the stock apears to be less risky and, when comparing its historical volatility, Champion Iron is 1.28 times less risky than Pengana Private. The stock trades about -0.06 of its potential returns per unit of risk. The Pengana Private Equity is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Pengana Private Equity on December 28, 2024 and sell it today you would lose (11.00) from holding Pengana Private Equity or give up 8.27% of portfolio value over 90 days.

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

Champion Iron  vs.  Pengana Private Equity

Champion Iron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champion Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pengana Private Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pengana Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pengana Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Champion Iron and Pengana Private

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

The idea behind Champion Iron and Pengana Private Equity 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.