Correlation Between Perseus Mining and AS Latvijas

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

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

Diversification Opportunities for Perseus Mining and AS Latvijas

0.07

Correlation Coefficient

Perseus Mining  AS Latvijas

Significant diversification

The 3 months correlation between Perseus and UM9 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams and Perseus Mining 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 Perseus Mining Limited are associated (or correlated) with AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of Perseus Mining i.e., Perseus Mining and AS Latvijas go up and down completely randomly.

Pair Corralation between Perseus Mining and AS Latvijas

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 8.74 times more return on investment than AS Latvijas. However, Perseus Mining is 8.74 times more volatile than AS Latvijas balzams. It trades about 0.06 of its potential returns per unit of risk. AS Latvijas balzams is currently generating about 0.13 per unit of risk. If you would invest  152.00  in Perseus Mining Limited on September 15, 2024 and sell it today you would earn a total of  12.00  from holding Perseus Mining Limited or generate 7.89% return on investment over 90 days.

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

Perseus Mining Limited  vs.  AS Latvijas balzams

Perseus Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AS Latvijas balzams

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AS Latvijas balzams are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AS Latvijas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Perseus Mining and AS Latvijas

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

The idea behind Perseus Mining Limited and AS Latvijas balzams 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.