Correlation Between American States and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both American States 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 American States and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American States Water and Perseus Mining Limited, you can compare the effects of market volatilities on American States 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 American States with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American States and Perseus Mining.
Diversification Opportunities for American States and Perseus Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Perseus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding American States Water and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and American States 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 American States Water 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 American States i.e., American States and Perseus Mining go up and down completely randomly.
Pair Corralation between American States and Perseus Mining
Assuming the 90 days horizon American States Water is expected to generate 0.64 times more return on investment than Perseus Mining. However, American States Water is 1.57 times less risky than Perseus Mining. It trades about 0.25 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 7,496 in American States Water on September 4, 2024 and sell it today you would earn a total of 599.00 from holding American States Water or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American States Water vs. Perseus Mining Limited
Performance |
| Timeline |
| American States Water |
| Perseus Mining |
American States and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American States and Perseus Mining
The main advantage of trading using opposite American States and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American States 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.| American States vs. ADRIATIC METALS LS 013355 | American States vs. Perseus Mining Limited | American States vs. CAREER EDUCATION | American States vs. DEVRY EDUCATION GRP |
| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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