Correlation Between Perseus Mining and Innovative International

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Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Innovative International 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 Innovative International 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 Innovative International Acquisition, you can compare the effects of market volatilities on Perseus Mining and Innovative International 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 Innovative International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Innovative International.

Diversification Opportunities for Perseus Mining and Innovative International

PerseusInnovativeDiversified AwayPerseusInnovativeDiversified Away100%
0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Perseus and Innovative is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Innovative International Acqui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative International 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 Innovative International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative International has no effect on the direction of Perseus Mining i.e., Perseus Mining and Innovative International go up and down completely randomly.

Pair Corralation between Perseus Mining and Innovative International

If you would invest  172.00  in Perseus Mining Limited on September 16, 2024 and sell it today you would earn a total of  2.00  from holding Perseus Mining Limited or generate 1.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy1.54%
ValuesDaily Returns

Perseus Mining Limited  vs.  Innovative International Acqui

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -5051015
JavaScript chart by amCharts 3.21.15PMNXF IOACU
       Timeline  
Perseus Mining 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.61.651.71.751.81.851.91.952
Innovative International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Innovative International Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Innovative International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Perseus Mining and Innovative International Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.01-6.75-4.49-2.220.03822.294.596.889.18 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15PMNXF IOACU
       Returns  

Pair Trading with Perseus Mining and Innovative International

The main advantage of trading using opposite Perseus Mining and Innovative International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Innovative International 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 Innovative International will offset losses from the drop in Innovative International's long position.
The idea behind Perseus Mining Limited and Innovative International Acquisition 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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