Correlation Between Peak Resources and Greenland Minerals

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

Diversification Opportunities for Peak Resources and Greenland Minerals

-0.74

Correlation Coefficient

Peak Resources  Greenland Minerals

Pay attention - limited upside

The 3 months correlation between Peak and Greenland is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Peak Resources Limited and Greenland Minerals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Minerals And 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 Greenland Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Minerals And has no effect on the direction of Peak Resources i.e., Peak Resources and Greenland Minerals go up and down completely randomly.

Pair Corralation between Peak Resources and Greenland Minerals

Assuming the 90 days horizon Peak Resources Limited is expected to under-perform the Greenland Minerals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Peak Resources Limited is 2.15 times less risky than Greenland Minerals. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Greenland Minerals And is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Greenland Minerals And on November 29, 2024 and sell it today you would earn a total of  3.10  from holding Greenland Minerals And or generate 155.0% return on investment over 90 days.

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

Peak Resources Limited  vs.  Greenland Minerals And

Peak Resources

Risk-Adjusted Performance

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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Greenland Minerals And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenland Minerals And are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Greenland Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peak Resources and Greenland Minerals

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

The idea behind Peak Resources Limited and Greenland Minerals And 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.