Correlation Between METAIR INVTS and Perseus Mining

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

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

Diversification Opportunities for METAIR INVTS and Perseus Mining

0.09

Correlation Coefficient

METAIR INVTS  Perseus Mining

Significant diversification

The 3 months correlation between METAIR and Perseus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding METAIR INVTS LTD and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and METAIR INVTS 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 METAIR INVTS LTD 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 METAIR INVTS i.e., METAIR INVTS and Perseus Mining go up and down completely randomly.

Pair Corralation between METAIR INVTS and Perseus Mining

Assuming the 90 days trading horizon METAIR INVTS LTD is expected to generate 1.51 times more return on investment than Perseus Mining. However, METAIR INVTS is 1.51 times more volatile than Perseus Mining Limited. It trades about 0.02 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.05 per unit of risk. If you would invest  57.00  in METAIR INVTS LTD on September 27, 2024 and sell it today you would earn a total of  0.00  from holding METAIR INVTS LTD or generate 0.0% return on investment over 90 days.

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

METAIR INVTS LTD  vs.  Perseus Mining Limited

METAIR INVTS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days METAIR INVTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Perseus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perseus Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perseus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with METAIR INVTS and Perseus Mining

The main advantage of trading using opposite METAIR INVTS and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METAIR INVTS 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 METAIR INVTS LTD and Perseus Mining Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..