Correlation Between DS Smith and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both DS Smith 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 DS Smith and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DS Smith PLC and Perseus Mining Limited, you can compare the effects of market volatilities on DS Smith 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 DS Smith with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DS Smith and Perseus Mining.
Diversification Opportunities for DS Smith and Perseus Mining
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DITHF and Perseus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding DS Smith 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 DS Smith 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 DS Smith 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 DS Smith i.e., DS Smith and Perseus Mining go up and down completely randomly.
Pair Corralation between DS Smith and Perseus Mining
Assuming the 90 days horizon DS Smith PLC is expected to generate 0.87 times more return on investment than Perseus Mining. However, DS Smith PLC is 1.15 times less risky than Perseus Mining. It trades about 0.1 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 625.00 in DS Smith PLC on November 2, 2024 and sell it today you would earn a total of 97.00 from holding DS Smith PLC or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
DS Smith PLC vs. Perseus Mining Limited
Performance |
| Timeline |
| DS Smith PLC |
| Perseus Mining |
DS Smith and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DS Smith and Perseus Mining
The main advantage of trading using opposite DS Smith and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DS Smith 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.| DS Smith vs. LAir Liquide SA | DS Smith vs. Corsair Gaming | DS Smith vs. Alaska Air Group | DS Smith vs. Air Products and |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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