Correlation Between Postal Savings and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Postal Savings 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 Postal Savings and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Perseus Mining Limited, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Perseus Mining.
Diversification Opportunities for Postal Savings and Perseus Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Postal and Perseus is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Perseus Mining go up and down completely randomly.
Pair Corralation between Postal Savings and Perseus Mining
Assuming the 90 days horizon Postal Savings is expected to generate 21.53 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, Postal Savings Bank is 1.61 times less risky than Perseus Mining. It trades about 0.01 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Perseus Mining Limited on November 18, 2024 and sell it today you would earn a total of 7.00 from holding Perseus Mining Limited or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Perseus Mining Limited
Performance |
| Timeline |
| Postal Savings Bank |
| Perseus Mining |
Postal Savings and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Perseus Mining
The main advantage of trading using opposite Postal Savings and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.| Postal Savings vs. Truist Financial | Postal Savings vs. OVERSEA CHINUNSPADR2 | Postal Savings vs. UNICREDIT SPA ADR | Postal Savings vs. UTD OV BK LOC ADR1 |
| Perseus Mining vs. Wyndham Hotels Resorts | Perseus Mining vs. MELIA HOTELS | Perseus Mining vs. INTERCONT HOTELS | Perseus Mining vs. Xenia Hotels Resorts |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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