Correlation Between Avis Budget and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Avis Budget 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 Avis Budget and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avis Budget Group and Perseus Mining Limited, you can compare the effects of market volatilities on Avis Budget 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 Avis Budget with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avis Budget and Perseus Mining.
Diversification Opportunities for Avis Budget and Perseus Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avis and Perseus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Avis Budget Group and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Avis Budget 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 Avis Budget Group 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 Avis Budget i.e., Avis Budget and Perseus Mining go up and down completely randomly.
Pair Corralation between Avis Budget and Perseus Mining
Considering the 90-day investment horizon Avis Budget Group is expected to generate 1.05 times more return on investment than Perseus Mining. However, Avis Budget is 1.05 times more volatile than Perseus Mining Limited. It trades about 0.28 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 8,594 in Avis Budget Group on August 31, 2024 and sell it today you would earn a total of 2,290 from holding Avis Budget Group or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avis Budget Group vs. Perseus Mining Limited
Performance |
| Timeline |
| Avis Budget Group |
| Perseus Mining |
Avis Budget and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avis Budget and Perseus Mining
The main advantage of trading using opposite Avis Budget and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avis Budget 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.| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Rio2 Limited | Perseus Mining vs. Palamina Corp | Perseus Mining vs. BTU Metals Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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