Correlation Between Australia and Peel Mining

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

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

Diversification Opportunities for Australia and Peel Mining

-0.61

Correlation Coefficient

Australia  Peel Mining

Excellent diversification

The 3 months correlation between Australia and Peel is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining and Australia 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 Australia and New are associated (or correlated) with Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of Australia i.e., Australia and Peel Mining go up and down completely randomly.

Pair Corralation between Australia and Peel Mining

Assuming the 90 days trading horizon Australia and New is expected to generate 0.09 times more return on investment than Peel Mining. However, Australia and New is 11.47 times less risky than Peel Mining. It trades about 0.03 of its potential returns per unit of risk. Peel Mining is currently generating about 0.0 per unit of risk. If you would invest  9,733  in Australia and New on April 4, 2025 and sell it today you would earn a total of  567.00  from holding Australia and New or generate 5.83% return on investment over 90 days.

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

Australia and New  vs.  Peel Mining

Australia and New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Australia and New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Australia is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Peel Mining

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peel Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Peel Mining may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Australia and Peel Mining

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

The idea behind Australia and New and Peel Mining 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.