Correlation Between Peel Mining and Cromwell Property

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

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

Diversification Opportunities for Peel Mining and Cromwell Property

-0.03

Correlation Coefficient

Peel Mining  Cromwell Property

Good diversification

The 3 months correlation between Peel and Cromwell is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property and Peel Mining 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 Peel Mining are associated (or correlated) with Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Peel Mining i.e., Peel Mining and Cromwell Property go up and down completely randomly.

Pair Corralation between Peel Mining and Cromwell Property

Assuming the 90 days trading horizon Peel Mining is expected to generate 18.94 times less return on investment than Cromwell Property. But when comparing it to its historical volatility, Peel Mining is 1.59 times less risky than Cromwell Property. It trades about 0.01 of its potential returns per unit of risk. Cromwell Property Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Cromwell Property Group on October 10, 2024 and sell it today you would earn a total of  4.00  from holding Cromwell Property Group or generate 11.11% return on investment over 90 days.

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

Peel Mining  vs.  Cromwell Property Group

Peel Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Peel Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Peel Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cromwell Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cromwell Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cromwell Property 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 Peel Mining and Cromwell Property

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

The idea behind Peel Mining and Cromwell Property Group 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.