Correlation Between KAUFMAN ET and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET and Perseus Mining 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 KAUFMAN ET and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Perseus Mining Limited, you can compare the effects of market volatilities on KAUFMAN ET and Perseus Mining 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 KAUFMAN ET with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Perseus Mining.
Diversification Opportunities for KAUFMAN ET and Perseus Mining
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KAUFMAN and Perseus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and KAUFMAN ET 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 KAUFMAN ET BROAD are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Perseus Mining go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Perseus Mining
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to generate 0.82 times more return on investment than Perseus Mining. However, KAUFMAN ET BROAD is 1.22 times less risky than Perseus Mining. It trades about 0.06 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.05 per unit of risk. If you would invest 2,640 in KAUFMAN ET BROAD on October 14, 2024 and sell it today you would earn a total of 570.00 from holding KAUFMAN ET BROAD or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Perseus Mining Limited
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Perseus Mining |
KAUFMAN ET and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Perseus Mining
The main advantage of trading using opposite KAUFMAN ET and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| KAUFMAN ET vs. SINGAPORE AIRLINES | KAUFMAN ET vs. Nok Airlines PCL | KAUFMAN ET vs. United Insurance Holdings | KAUFMAN ET vs. Southwest Airlines Co |
| Perseus Mining vs. United Breweries Co | Perseus Mining vs. CEOTRONICS | Perseus Mining vs. CeoTronics AG | Perseus Mining vs. The Boston Beer |
Check out your portfolio center.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 Valuation module to check real value of public entities based on technical and fundamental data.
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