Correlation Between Carawine Resources and Pengana Private

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

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

Diversification Opportunities for Carawine Resources and Pengana Private

-0.51

Correlation Coefficient

Carawine Resources  Pengana Private

Excellent diversification

The 3 months correlation between Carawine and Pengana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carawine Resources Limited 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 Carawine Resources 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 Carawine Resources Limited 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 Carawine Resources i.e., Carawine Resources and Pengana Private go up and down completely randomly.

Pair Corralation between Carawine Resources and Pengana Private

Assuming the 90 days trading horizon Carawine Resources is expected to generate 2.18 times less return on investment than Pengana Private. In addition to that, Carawine Resources is 1.66 times more volatile than Pengana Private Equity. It trades about 0.02 of its total potential returns per unit of risk. Pengana Private Equity is currently generating about 0.07 per unit of volatility. If you would invest  118.00  in Pengana Private Equity on October 8, 2024 and sell it today you would earn a total of  7.00  from holding Pengana Private Equity or generate 5.93% return on investment over 90 days.

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

Carawine Resources Limited  vs.  Pengana Private Equity

Carawine Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carawine Resources Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carawine Resources is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pengana Private Equity

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pengana Private Equity are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Carawine Resources and Pengana Private

The main advantage of trading using opposite Carawine Resources and Pengana Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carawine Resources 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 Carawine Resources Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.