Correlation Between British Amer and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both British Amer 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 British Amer and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between biOasis Technologies and Perseus Mining, you can compare the effects of market volatilities on British Amer 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 British Amer with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Perseus Mining.
Diversification Opportunities for British Amer and Perseus Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between British and Perseus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding biOasis Technologies and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and British Amer 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 biOasis Technologies 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 British Amer i.e., British Amer and Perseus Mining go up and down completely randomly.
Pair Corralation between British Amer and Perseus Mining
Assuming the 90 days horizon biOasis Technologies is expected to generate 40.84 times more return on investment than Perseus Mining. However, British Amer is 40.84 times more volatile than Perseus Mining. It trades about 0.09 of its potential returns per unit of risk. Perseus Mining is currently generating about 0.03 per unit of risk. If you would invest 18.00 in biOasis Technologies on September 2, 2024 and sell it today you would earn a total of 108.00 from holding biOasis Technologies or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
biOasis Technologies vs. Perseus Mining
Performance |
| Timeline |
| biOasis Technologies |
| Perseus Mining |
British Amer and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Perseus Mining
The main advantage of trading using opposite British Amer and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer 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.| British Amer vs. Canadian Imperial Bank | British Amer vs. Pollard Banknote Limited | British Amer vs. US Financial 15 | British Amer vs. High Liner Foods |
| Perseus Mining vs. Serabi Gold PLC | Perseus Mining vs. Sulliden Minerals SA | Perseus Mining vs. Precipitate Gold Corp | Perseus Mining vs. Rackla Metals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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