Correlation Between Stora Enso and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Stora Enso 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 Stora Enso and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Perseus Mining Limited, you can compare the effects of market volatilities on Stora Enso 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 Stora Enso with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Perseus Mining.
Diversification Opportunities for Stora Enso and Perseus Mining
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stora and Perseus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Stora Enso 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 Stora Enso Oyj 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 Stora Enso i.e., Stora Enso and Perseus Mining go up and down completely randomly.
Pair Corralation between Stora Enso and Perseus Mining
Assuming the 90 days trading horizon Stora Enso Oyj is expected to generate 1.02 times more return on investment than Perseus Mining. However, Stora Enso is 1.02 times more volatile than Perseus Mining Limited. It trades about 0.27 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.21 per unit of risk. If you would invest 934.00 in Stora Enso Oyj on October 23, 2024 and sell it today you would earn a total of 71.00 from holding Stora Enso Oyj or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Stora Enso Oyj vs. Perseus Mining Limited
Performance |
| Timeline |
| Stora Enso Oyj |
| Perseus Mining |
Stora Enso and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Perseus Mining
The main advantage of trading using opposite Stora Enso and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso 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.| Stora Enso vs. UPM Kymmene Oyj | Stora Enso vs. STORA ENSO OYJ | Stora Enso vs. Suzano SA | Stora Enso vs. Suzano SA |
| Perseus Mining vs. Beazer Homes USA | Perseus Mining vs. LANDSEA GREEN MANAGEMENT | Perseus Mining vs. ADDUS HOMECARE | Perseus Mining vs. CITY OFFICE REIT |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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