Correlation Between ANHUI CONCH and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both ANHUI CONCH 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 ANHUI CONCH and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANHUI CH H and Perseus Mining Limited, you can compare the effects of market volatilities on ANHUI CONCH 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 ANHUI CONCH with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANHUI CONCH and Perseus Mining.
Diversification Opportunities for ANHUI CONCH and Perseus Mining
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANHUI and Perseus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ANHUI CH H and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and ANHUI CONCH 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 ANHUI CH H 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 ANHUI CONCH i.e., ANHUI CONCH and Perseus Mining go up and down completely randomly.
Pair Corralation between ANHUI CONCH and Perseus Mining
Assuming the 90 days trading horizon ANHUI CH H is expected to generate 1.92 times more return on investment than Perseus Mining. However, ANHUI CONCH is 1.92 times more volatile than Perseus Mining Limited. It trades about 0.08 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.08 per unit of risk. If you would invest 112.00 in ANHUI CH H on September 12, 2024 and sell it today you would earn a total of 139.00 from holding ANHUI CH H or generate 124.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ANHUI CH H vs. Perseus Mining Limited
Performance |
| Timeline |
| ANHUI CONCH |
| Perseus Mining |
ANHUI CONCH and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANHUI CONCH and Perseus Mining
The main advantage of trading using opposite ANHUI CONCH and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANHUI CONCH 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.| ANHUI CONCH vs. Perseus Mining Limited | ANHUI CONCH vs. Sabra Health Care | ANHUI CONCH vs. Natural Health Trends | ANHUI CONCH vs. MINCO SILVER |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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