Correlation Between Perseus Mining and Bold Ventures

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

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

Diversification Opportunities for Perseus Mining and Bold Ventures

-0.43

Correlation Coefficient

Perseus Mining  Bold Ventures

Very good diversification

The 3 months correlation between Perseus and Bold is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Bold Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bold Ventures 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 Bold Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bold Ventures has no effect on the direction of Perseus Mining i.e., Perseus Mining and Bold Ventures go up and down completely randomly.

Pair Corralation between Perseus Mining and Bold Ventures

Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.41 times more return on investment than Bold Ventures. However, Perseus Mining is 2.43 times less risky than Bold Ventures. It trades about -0.1 of its potential returns per unit of risk. Bold Ventures is currently generating about -0.21 per unit of risk. If you would invest  240.00  in Perseus Mining on September 27, 2024 and sell it today you would lose (13.00) from holding Perseus Mining or give up 5.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Perseus Mining  vs.  Bold Ventures

Perseus Mining

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Perseus Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Bold Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bold Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Perseus Mining and Bold Ventures

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

The idea behind Perseus Mining and Bold Ventures 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.