Correlation Between MidCap Financial and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both MidCap Financial 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 MidCap Financial and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Perseus Mining Limited, you can compare the effects of market volatilities on MidCap Financial 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 MidCap Financial with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Perseus Mining.
Diversification Opportunities for MidCap Financial and Perseus Mining
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MidCap and Perseus is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and MidCap Financial 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 MidCap Financial Investment 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 MidCap Financial i.e., MidCap Financial and Perseus Mining go up and down completely randomly.
Pair Corralation between MidCap Financial and Perseus Mining
Assuming the 90 days trading horizon MidCap Financial is expected to generate 1.3 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, MidCap Financial Investment is 2.15 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Perseus Mining Limited on October 16, 2024 and sell it today you would earn a total of 44.00 from holding Perseus Mining Limited or generate 38.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Perseus Mining Limited
Performance |
| Timeline |
| MidCap Financial Inv |
| Perseus Mining |
MidCap Financial and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Perseus Mining
The main advantage of trading using opposite MidCap Financial and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial 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.| MidCap Financial vs. MEDICAL FACILITIES NEW | MidCap Financial vs. VIRGIN WINES UK | MidCap Financial vs. Marie Brizard Wine | MidCap Financial vs. IMAGIN MEDICAL INC |
| Perseus Mining vs. CHRYSALIS INVESTMENTS LTD | Perseus Mining vs. SEI INVESTMENTS | Perseus Mining vs. PICKN PAY STORES | Perseus Mining vs. MidCap Financial Investment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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