Correlation Between Jade Gas and Peel Mining

Can any of the company-specific risk be diversified away by investing in both Jade Gas 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 Jade Gas and Peel Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jade Gas Holdings and Peel Mining, you can compare the effects of market volatilities on Jade Gas 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 Jade Gas with a short position of Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jade Gas and Peel Mining.

Diversification Opportunities for Jade Gas and Peel Mining

0.32

Correlation Coefficient

Jade Gas  Peel Mining

Weak diversification

The 3 months correlation between Jade and Peel is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jade Gas Holdings and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and Jade Gas 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 Jade Gas Holdings 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 Jade Gas i.e., Jade Gas and Peel Mining go up and down completely randomly.

Pair Corralation between Jade Gas and Peel Mining

Assuming the 90 days trading horizon Jade Gas Holdings is expected to generate 1.28 times more return on investment than Peel Mining. However, Jade Gas is 1.28 times more volatile than Peel Mining. It trades about 0.1 of its potential returns per unit of risk. Peel Mining is currently generating about 0.01 per unit of risk. If you would invest  3.40  in Jade Gas Holdings on October 11, 2024 and sell it today you would earn a total of  0.20  from holding Jade Gas Holdings or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Jade Gas Holdings  vs.  Peel Mining

Jade Gas Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Peel Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peel Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Peel Mining 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 Jade Gas and Peel Mining

The main advantage of trading using opposite Jade Gas and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jade Gas 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.

The idea behind Jade Gas Holdings and Peel Mining 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.