Correlation Between Peak Resources and KTL GLOBAL

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

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

Diversification Opportunities for Peak Resources and KTL GLOBAL

0.0

Correlation Coefficient

Peak Resources  KTL GLOBAL

Pay attention - limited upside

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

Pair Corralation between Peak Resources and KTL GLOBAL

If you would invest  5.90  in Peak Resources Limited on December 27, 2024 and sell it today you would lose (0.15) from holding Peak Resources Limited or give up 2.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Peak Resources Limited  vs.  KTL GLOBAL

Peak Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peak Resources Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Peak Resources reported solid returns over the last few months and may actually be approaching a breakup point.

KTL GLOBAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days KTL GLOBAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KTL GLOBAL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Peak Resources and KTL GLOBAL

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

The idea behind Peak Resources Limited and KTL GLOBAL 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.