Correlation Between Bank of New York and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Bank of New York 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 Bank of New York and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and Perseus Mining Limited, you can compare the effects of market volatilities on Bank of New York 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 Bank of New York with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Perseus Mining.
Diversification Opportunities for Bank of New York and Perseus Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Perseus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Bank of New York 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 Bank of New 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 Bank of New York i.e., Bank of New York and Perseus Mining go up and down completely randomly.
Pair Corralation between Bank of New York and Perseus Mining
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.35 times more return on investment than Perseus Mining. However, Bank of New is 2.85 times less risky than Perseus Mining. It trades about 0.24 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.04 per unit of risk. If you would invest 5,807 in Bank of New on September 2, 2024 and sell it today you would earn a total of 2,380 from holding Bank of New or generate 40.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Perseus Mining Limited
Performance |
| Timeline |
| Bank of New York |
| Perseus Mining |
Bank of New York and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Perseus Mining
The main advantage of trading using opposite Bank of New York and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York 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.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Rio2 Limited | Perseus Mining vs. Palamina Corp | Perseus Mining vs. Grande Portage Resources |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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