Correlation Between Peel Mining and Truscott Mining

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

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

Diversification Opportunities for Peel Mining and Truscott Mining

0.25

Correlation Coefficient

Peel Mining  Truscott Mining

Modest diversification

The 3 months correlation between Peel and Truscott is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp 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 Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Peel Mining i.e., Peel Mining and Truscott Mining go up and down completely randomly.

Pair Corralation between Peel Mining and Truscott Mining

Assuming the 90 days trading horizon Peel Mining is expected to generate 31.92 times less return on investment than Truscott Mining. In addition to that, Peel Mining is 1.54 times more volatile than Truscott Mining Corp. It trades about 0.0 of its total potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.08 per unit of volatility. If you would invest  6.00  in Truscott Mining Corp on October 4, 2024 and sell it today you would earn a total of  1.80  from holding Truscott Mining Corp or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Peel Mining  vs.  Truscott Mining Corp

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 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Truscott Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Truscott Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Truscott Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peel Mining and Truscott Mining

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

The idea behind Peel Mining and Truscott Mining Corp 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 CEOs Directory module to screen CEOs from public companies around the world.