Correlation Between Peel Mining and Suncorp

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

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

Diversification Opportunities for Peel Mining and Suncorp

-0.09

Correlation Coefficient

Peel Mining  Suncorp

Good diversification

The 3 months correlation between Peel and Suncorp is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group 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 Suncorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group has no effect on the direction of Peel Mining i.e., Peel Mining and Suncorp go up and down completely randomly.

Pair Corralation between Peel Mining and Suncorp

Assuming the 90 days trading horizon Peel Mining is expected to generate 1.07 times less return on investment than Suncorp. In addition to that, Peel Mining is 4.18 times more volatile than Suncorp Group. It trades about 0.02 of its total potential returns per unit of risk. Suncorp Group is currently generating about 0.1 per unit of volatility. If you would invest  1,804  in Suncorp Group on September 26, 2024 and sell it today you would earn a total of  133.00  from holding Suncorp Group or generate 7.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Peel Mining  vs.  Suncorp Group

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 uncertain basic indicators, Peel Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Suncorp Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suncorp Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Suncorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Peel Mining and Suncorp

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

The idea behind Peel Mining and Suncorp 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..