Correlation Between Peak Resources and TRADEGATE

Can any of the company-specific risk be diversified away by investing in both Peak Resources and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on Peak Resources and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Resources and TRADEGATE.

Diversification Opportunities for Peak Resources and TRADEGATE

-0.29

Correlation Coefficient

Peak Resources  TRADEGATE

Very good diversification

The 3 months correlation between Peak and TRADEGATE is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of Peak Resources i.e., Peak Resources and TRADEGATE go up and down completely randomly.

Pair Corralation between Peak Resources and TRADEGATE

Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the TRADEGATE. In addition to that, Peak Resources is 26.4 times more volatile than TRADEGATE. It trades about -0.04 of its total potential returns per unit of risk. TRADEGATE is currently generating about -0.02 per unit of volatility. If you would invest  9,100  in TRADEGATE on September 4, 2024 and sell it today you would lose (50.00) from holding TRADEGATE or give up 0.55% of portfolio value over 90 days.

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

Peak Resources Limited  vs.  TRADEGATE

Peak Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peak Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TRADEGATE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Peak Resources and TRADEGATE

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

The idea behind Peak Resources Limited and TRADEGATE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.