Correlation Between Pinnacle Investment and Indiana Resources

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

By analyzing existing cross correlation between Pinnacle Investment Management and Indiana Resources, you can compare the effects of market volatilities on Pinnacle Investment and Indiana Resources 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 Pinnacle Investment with a short position of Indiana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Indiana Resources.

Diversification Opportunities for Pinnacle Investment and Indiana Resources

-0.44

Correlation Coefficient

Pinnacle Investment  Indiana Resources

Very good diversification

The 3 months correlation between Pinnacle and Indiana is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Indiana Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indiana Resources and Pinnacle Investment 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 Pinnacle Investment Management are associated (or correlated) with Indiana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indiana Resources has no effect on the direction of Pinnacle Investment i.e., Pinnacle Investment and Indiana Resources go up and down completely randomly.

Pair Corralation between Pinnacle Investment and Indiana Resources

Assuming the 90 days trading horizon Pinnacle Investment Management is expected to under-perform the Indiana Resources. In addition to that, Pinnacle Investment is 1.16 times more volatile than Indiana Resources. It trades about -0.12 of its total potential returns per unit of risk. Indiana Resources is currently generating about 0.19 per unit of volatility. If you would invest  6.10  in Indiana Resources on December 30, 2024 and sell it today you would earn a total of  1.70  from holding Indiana Resources or generate 27.87% return on investment over 90 days.

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

Pinnacle Investment Management  vs.  Indiana Resources

Pinnacle Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinnacle Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Indiana Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Indiana Resources are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indiana Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pinnacle Investment and Indiana Resources

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

The idea behind Pinnacle Investment Management and Indiana Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.