Correlation Between Champion Iron and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Perseus Mining, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Perseus Mining.
Diversification Opportunities for Champion Iron and Perseus Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Perseus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Champion Iron 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 Champion Iron 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 Champion Iron i.e., Champion Iron and Perseus Mining go up and down completely randomly.
Pair Corralation between Champion Iron and Perseus Mining
Assuming the 90 days trading horizon Champion Iron is expected to under-perform the Perseus Mining. In addition to that, Champion Iron is 1.07 times more volatile than Perseus Mining. It trades about -0.03 of its total potential returns per unit of risk. Perseus Mining is currently generating about 0.08 per unit of volatility. If you would invest 158.00 in Perseus Mining on September 4, 2024 and sell it today you would earn a total of 78.00 from holding Perseus Mining or generate 49.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Champion Iron vs. Perseus Mining
Performance |
| Timeline |
| Champion Iron |
| Perseus Mining |
Champion Iron and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Perseus Mining
The main advantage of trading using opposite Champion Iron and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.| Champion Iron vs. Black Iron | Champion Iron vs. Wesdome Gold Mines | Champion Iron vs. GoGold Resources | Champion Iron vs. Mason Graphite |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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