Correlation Between Peloton Minerals and Ampleforth

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

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

Diversification Opportunities for Peloton Minerals and Ampleforth

-0.08

Correlation Coefficient

Peloton Minerals  Ampleforth

Good diversification

The 3 months correlation between Peloton and Ampleforth is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Peloton Minerals and Ampleforth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampleforth and Peloton Minerals 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 Peloton Minerals are associated (or correlated) with Ampleforth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampleforth has no effect on the direction of Peloton Minerals i.e., Peloton Minerals and Ampleforth go up and down completely randomly.

Pair Corralation between Peloton Minerals and Ampleforth

Assuming the 90 days horizon Peloton Minerals is expected to under-perform the Ampleforth. In addition to that, Peloton Minerals is 1.47 times more volatile than Ampleforth. It trades about -0.01 of its total potential returns per unit of risk. Ampleforth is currently generating about 0.09 per unit of volatility. If you would invest  109.00  in Ampleforth on September 6, 2024 and sell it today you would earn a total of  26.00  from holding Ampleforth or generate 23.85% return on investment over 90 days.

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

Peloton Minerals  vs.  Ampleforth

Peloton Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peloton Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ampleforth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ampleforth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Ampleforth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peloton Minerals and Ampleforth

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

The idea behind Peloton Minerals and Ampleforth 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.