Correlation Between DFS Furniture and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Perseus Mining Limited, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Perseus Mining.
Diversification Opportunities for DFS Furniture and Perseus Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DFS and Perseus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and Perseus Mining go up and down completely randomly.
Pair Corralation between DFS Furniture and Perseus Mining
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 1.08 times more return on investment than Perseus Mining. However, DFS Furniture is 1.08 times more volatile than Perseus Mining Limited. It trades about 0.01 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.18 per unit of risk. If you would invest 158.00 in DFS Furniture PLC on August 29, 2024 and sell it today you would earn a total of 0.00 from holding DFS Furniture PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Perseus Mining Limited
Performance |
| Timeline |
| DFS Furniture PLC |
| Perseus Mining |
DFS Furniture and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Perseus Mining
The main advantage of trading using opposite DFS Furniture and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Sunny Optical Technology | DFS Furniture vs. CITY OFFICE REIT | DFS Furniture vs. Luckin Coffee | DFS Furniture vs. SWISS WATER DECAFFCOFFEE |
| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Agnico Eagle Mines | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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