Correlation Between Digi International and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Perseus Mining Limited, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Perseus Mining.
Diversification Opportunities for Digi International and Perseus Mining
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digi and Perseus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Digi International 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 Digi International 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 Digi International i.e., Digi International and Perseus Mining go up and down completely randomly.
Pair Corralation between Digi International and Perseus Mining
Given the investment horizon of 90 days Digi International is expected to generate 0.74 times more return on investment than Perseus Mining. However, Digi International is 1.35 times less risky than Perseus Mining. It trades about 0.17 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.01 per unit of risk. If you would invest 2,693 in Digi International on September 20, 2024 and sell it today you would earn a total of 618.00 from holding Digi International or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Perseus Mining Limited
Performance |
| Timeline |
| Digi International |
| Perseus Mining |
Digi International and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Perseus Mining
The main advantage of trading using opposite Digi International and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Passage Bio | Digi International vs. Black Diamond Therapeutics | Digi International vs. Alector | Digi International vs. Century Therapeutics |
| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Liberty Gold Corp | Perseus Mining vs. Rio2 Limited | Perseus Mining vs. Orezone Gold 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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