Correlation Between Peel Mining and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Peel Mining and Svenska Cellulosa 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 Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peel Mining Limited and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Peel Mining and Svenska Cellulosa 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 Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peel Mining and Svenska Cellulosa.
Diversification Opportunities for Peel Mining and Svenska Cellulosa
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peel and Svenska is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Peel Mining Limited and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa 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 Limited are associated (or correlated) with Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Peel Mining i.e., Peel Mining and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Peel Mining and Svenska Cellulosa
Assuming the 90 days horizon Peel Mining Limited is expected to under-perform the Svenska Cellulosa. In addition to that, Peel Mining is 2.77 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about -0.1 of its total potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.22 per unit of volatility. If you would invest 1,158 in Svenska Cellulosa Aktiebolaget on October 26, 2024 and sell it today you would earn a total of 70.00 from holding Svenska Cellulosa Aktiebolaget or generate 6.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Peel Mining Limited vs. Svenska Cellulosa Aktiebolaget
Performance |
Timeline |
Peel Mining Limited |
Svenska Cellulosa |
Peel Mining and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peel Mining and Svenska Cellulosa
The main advantage of trading using opposite Peel Mining and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peel Mining position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.Peel Mining vs. Jacquet Metal Service | Peel Mining vs. Forsys Metals Corp | Peel Mining vs. CarsalesCom | Peel Mining vs. Geely Automobile Holdings |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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