Correlation Between AAC TECHNOLOGHLDGADR and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Perseus Mining Limited, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Perseus Mining.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Perseus Mining
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AAC and Perseus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Perseus Mining go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Perseus Mining
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.64 times more return on investment than Perseus Mining. However, AAC TECHNOLOGHLDGADR is 1.64 times more volatile than Perseus Mining Limited. It trades about 0.27 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.11 per unit of risk. If you would invest 350.00 in AAC TECHNOLOGHLDGADR on September 5, 2024 and sell it today you would earn a total of 78.00 from holding AAC TECHNOLOGHLDGADR or generate 22.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Perseus Mining Limited
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Perseus Mining |
AAC TECHNOLOGHLDGADR and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Perseus Mining
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR 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.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia | AAC TECHNOLOGHLDGADR vs. ZTE Corporation |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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