Correlation Between BII Railway and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Perseus Mining Limited, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Perseus Mining.
Diversification Opportunities for BII Railway and Perseus Mining
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BII and Perseus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and Perseus Mining go up and down completely randomly.
Pair Corralation between BII Railway and Perseus Mining
Assuming the 90 days horizon BII Railway is expected to generate 1.68 times less return on investment than Perseus Mining. In addition to that, BII Railway is 1.13 times more volatile than Perseus Mining Limited. It trades about 0.02 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.05 per unit of volatility. If you would invest 133.00 in Perseus Mining Limited on October 14, 2024 and sell it today you would earn a total of 23.00 from holding Perseus Mining Limited or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. Perseus Mining Limited
Performance |
| Timeline |
| BII Railway Transpor |
| Perseus Mining |
BII Railway and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Perseus Mining
The main advantage of trading using opposite BII Railway and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. UNIVMUSIC GRPADR050 | BII Railway vs. Zoom Video Communications | BII Railway vs. Algonquin Power Utilities | BII Railway vs. DALATA HOTEL |
| Perseus Mining vs. United Breweries Co | Perseus Mining vs. CEOTRONICS | Perseus Mining vs. CeoTronics AG | Perseus Mining vs. The Boston Beer |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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