Correlation Between Perseus Mining and 060505FQ2

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and 060505FQ2 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 060505FQ2 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 BAC 43, you can compare the effects of market volatilities on Perseus Mining and 060505FQ2 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 060505FQ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and 060505FQ2.

Diversification Opportunities for Perseus Mining and 060505FQ2

0.18

Correlation Coefficient

Perseus Mining  060505FQ2

Average diversification

The 3 months correlation between Perseus and 060505FQ2 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and BAC 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 060505FQ2 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 060505FQ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 060505FQ2 has no effect on the direction of Perseus Mining i.e., Perseus Mining and 060505FQ2 go up and down completely randomly.

Pair Corralation between Perseus Mining and 060505FQ2

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 2.65 times more return on investment than 060505FQ2. However, Perseus Mining is 2.65 times more volatile than BAC 43. It trades about 0.02 of its potential returns per unit of risk. BAC 43 is currently generating about -0.09 per unit of risk. If you would invest  165.00  in Perseus Mining Limited on September 5, 2024 and sell it today you would earn a total of  3.00  from holding Perseus Mining Limited or generate 1.82% return on investment over 90 days.

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

Perseus Mining Limited  vs.  BAC 43

Perseus Mining

Risk-Adjusted Performance

1 of 100

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.

060505FQ2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAC 43 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BAC 43 investors.

Pair Trading with Perseus Mining and 060505FQ2

The main advantage of trading using opposite Perseus Mining and 060505FQ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, 060505FQ2 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 060505FQ2 will offset losses from the drop in 060505FQ2's long position.

The idea behind Perseus Mining Limited and BAC 43 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 Stocks Directory module to find actively traded stocks across global markets.