Correlation Between Ironbark Capital and Perseus Mining

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

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

Diversification Opportunities for Ironbark Capital and Perseus Mining

0.0

Correlation Coefficient

Ironbark Capital  Perseus Mining

Pay attention - limited upside

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

Pair Corralation between Ironbark Capital and Perseus Mining

Assuming the 90 days trading horizon Ironbark Capital is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ironbark Capital is 2.59 times less risky than Perseus Mining. The stock trades about -0.12 of its potential returns per unit of risk. The Perseus Mining is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  247.00  in Perseus Mining on September 15, 2024 and sell it today you would earn a total of  27.00  from holding Perseus Mining or generate 10.93% return on investment over 90 days.

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

Ironbark Capital  vs.  Perseus Mining

Ironbark Capital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ironbark Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Perseus Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ironbark Capital and Perseus Mining

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

The idea behind Ironbark Capital and Perseus 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.