Correlation Between Perseus Mining and Autosports

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

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

Diversification Opportunities for Perseus Mining and Autosports

0.69

Correlation Coefficient

Perseus Mining  Autosports

Poor diversification

The 3 months correlation between Perseus and Autosports is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Perseus Mining i.e., Perseus Mining and Autosports go up and down completely randomly.

Pair Corralation between Perseus Mining and Autosports

Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.3 times more return on investment than Autosports. However, Perseus Mining is 1.3 times more volatile than Autosports Group. It trades about 0.05 of its potential returns per unit of risk. Autosports Group is currently generating about -0.09 per unit of risk. If you would invest  247.00  in Perseus Mining on August 31, 2024 and sell it today you would earn a total of  15.00  from holding Perseus Mining or generate 6.07% return on investment over 90 days.

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

Perseus Mining  vs.  Autosports Group

Perseus Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 4 (%) 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 December 2024.

Autosports Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autosports Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Perseus Mining and Autosports

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

The idea behind Perseus Mining and Autosports Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.