Correlation Between Benjamin Hill and Peloton Minerals

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

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

Diversification Opportunities for Benjamin Hill and Peloton Minerals

-0.32

Correlation Coefficient

Benjamin Hill  Peloton Minerals

Very good diversification

The 3 months correlation between Benjamin and Peloton is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Benjamin Hill Mining and Peloton Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Minerals and Benjamin Hill 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 Benjamin Hill Mining are associated (or correlated) with Peloton Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Minerals has no effect on the direction of Benjamin Hill i.e., Benjamin Hill and Peloton Minerals go up and down completely randomly.

Pair Corralation between Benjamin Hill and Peloton Minerals

Assuming the 90 days horizon Benjamin Hill Mining is expected to generate 1.14 times more return on investment than Peloton Minerals. However, Benjamin Hill is 1.14 times more volatile than Peloton Minerals. It trades about 0.09 of its potential returns per unit of risk. Peloton Minerals is currently generating about -0.02 per unit of risk. If you would invest  49.00  in Benjamin Hill Mining on March 8, 2024 and sell it today you would earn a total of  11.00  from holding Benjamin Hill Mining or generate 22.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Benjamin Hill Mining  vs.  Peloton Minerals

Benjamin Hill Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Benjamin Hill Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Benjamin Hill reported solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Benjamin Hill and Peloton Minerals

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

The idea behind Benjamin Hill Mining and Peloton Minerals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.