Correlation Between Peak Resources and Metals Creek

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

Diversification Opportunities for Peak Resources and Metals Creek

0.0

Correlation Coefficient

Peak Resources  Metals Creek

Pay attention - limited upside

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

Pair Corralation between Peak Resources and Metals Creek

If you would invest  1.00  in Metals Creek Resources on September 4, 2024 and sell it today you would earn a total of  2.00  from holding Metals Creek Resources or generate 200.0% return on investment over 90 days.

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

Peak Resources Limited  vs.  Metals Creek Resources

Peak Resources

Risk-Adjusted Performance

0 of 100

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 nearly stable technical and fundamental indicators, Peak Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Metals Creek Resources

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Peak Resources and Metals Creek

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

The idea behind Peak Resources Limited and Metals Creek 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.