Correlation Between Custom Truck and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Custom Truck 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 Custom Truck and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and Perseus Mining Limited, you can compare the effects of market volatilities on Custom Truck 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 Custom Truck with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and Perseus Mining.
Diversification Opportunities for Custom Truck and Perseus Mining
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Custom and Perseus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Custom Truck 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 Custom Truck One 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 Custom Truck i.e., Custom Truck and Perseus Mining go up and down completely randomly.
Pair Corralation between Custom Truck and Perseus Mining
Given the investment horizon of 90 days Custom Truck One is expected to generate 1.0 times more return on investment than Perseus Mining. However, Custom Truck is 1.0 times more volatile than Perseus Mining Limited. It trades about 0.51 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 397.00 in Custom Truck One on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Custom Truck One or generate 51.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Custom Truck One vs. Perseus Mining Limited
Performance |
| Timeline |
| Custom Truck One |
| Perseus Mining |
Custom Truck and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and Perseus Mining
The main advantage of trading using opposite Custom Truck and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck 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.| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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