Correlation Between TT Electronics and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both TT Electronics 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 TT Electronics and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TT Electronics PLC and Perseus Mining Limited, you can compare the effects of market volatilities on TT Electronics 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 TT Electronics with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of TT Electronics and Perseus Mining.
Diversification Opportunities for TT Electronics and Perseus Mining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 7TT and Perseus is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TT Electronics PLC and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and TT Electronics 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 TT Electronics PLC 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 TT Electronics i.e., TT Electronics and Perseus Mining go up and down completely randomly.
Pair Corralation between TT Electronics and Perseus Mining
Assuming the 90 days trading horizon TT Electronics PLC is expected to under-perform the Perseus Mining. In addition to that, TT Electronics is 1.03 times more volatile than Perseus Mining Limited. It trades about -0.03 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.04 per unit of volatility. If you would invest 122.00 in Perseus Mining Limited on October 26, 2024 and sell it today you would earn a total of 46.00 from holding Perseus Mining Limited or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TT Electronics PLC vs. Perseus Mining Limited
Performance |
| Timeline |
| TT Electronics PLC |
| Perseus Mining |
TT Electronics and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TT Electronics and Perseus Mining
The main advantage of trading using opposite TT Electronics and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TT Electronics 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.| TT Electronics vs. Stewart Information Services | TT Electronics vs. CHAMPION IRON | TT Electronics vs. RELIANCE STEEL AL | TT Electronics vs. MOUNT GIBSON IRON |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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