Correlation Between Peninsula Energy and REMEDY ENTERTAINMENT

Can any of the company-specific risk be diversified away by investing in both Peninsula Energy and REMEDY ENTERTAINMENT 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 Peninsula Energy and REMEDY ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peninsula Energy Limited and REMEDY ENTERTAINMENT OYJ, you can compare the effects of market volatilities on Peninsula Energy and REMEDY ENTERTAINMENT 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 Peninsula Energy with a short position of REMEDY ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peninsula Energy and REMEDY ENTERTAINMENT.

Diversification Opportunities for Peninsula Energy and REMEDY ENTERTAINMENT

0.73

Correlation Coefficient

Peninsula Energy  REMEDY ENTERTAINMENT

Poor diversification

The 3 months correlation between Peninsula and REMEDY is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Peninsula Energy Limited and REMEDY ENTERTAINMENT OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMEDY ENTERTAINMENT OYJ and Peninsula Energy 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 Peninsula Energy Limited are associated (or correlated) with REMEDY ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMEDY ENTERTAINMENT OYJ has no effect on the direction of Peninsula Energy i.e., Peninsula Energy and REMEDY ENTERTAINMENT go up and down completely randomly.

Pair Corralation between Peninsula Energy and REMEDY ENTERTAINMENT

Assuming the 90 days horizon Peninsula Energy Limited is expected to under-perform the REMEDY ENTERTAINMENT. In addition to that, Peninsula Energy is 2.98 times more volatile than REMEDY ENTERTAINMENT OYJ. It trades about -0.06 of its total potential returns per unit of risk. REMEDY ENTERTAINMENT OYJ is currently generating about -0.06 per unit of volatility. If you would invest  1,590  in REMEDY ENTERTAINMENT OYJ on October 11, 2024 and sell it today you would lose (134.00) from holding REMEDY ENTERTAINMENT OYJ or give up 8.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Peninsula Energy Limited  vs.  REMEDY ENTERTAINMENT OYJ

Peninsula Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peninsula Energy 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REMEDY ENTERTAINMENT OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Peninsula Energy and REMEDY ENTERTAINMENT

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

The idea behind Peninsula Energy Limited and REMEDY ENTERTAINMENT OYJ 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.