Correlation Between Soken Chemical and Peak Minerals

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

By analyzing existing cross correlation between Soken Chemical Engineering and Peak Minerals Limited, you can compare the effects of market volatilities on Soken Chemical and Peak 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 Soken Chemical with a short position of Peak Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soken Chemical and Peak Minerals.

Diversification Opportunities for Soken Chemical and Peak Minerals

0.0

Correlation Coefficient

Soken Chemical  Peak Minerals

Pay attention - limited upside

The 3 months correlation between Soken and Peak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Soken Chemical Engineering and Peak Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Minerals Limited and Soken Chemical 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 Soken Chemical Engineering are associated (or correlated) with Peak Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Minerals Limited has no effect on the direction of Soken Chemical i.e., Soken Chemical and Peak Minerals go up and down completely randomly.

Pair Corralation between Soken Chemical and Peak Minerals

If you would invest  0.40  in Peak Minerals Limited on October 24, 2024 and sell it today you would earn a total of  0.25  from holding Peak Minerals Limited or generate 62.5% return on investment over 90 days.

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

Soken Chemical Engineering  vs.  Peak Minerals Limited

Soken Chemical Engin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soken Chemical Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Soken Chemical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Peak Minerals Limited

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Soken Chemical and Peak Minerals

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

The idea behind Soken Chemical Engineering and Peak Minerals Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.