Correlation Between FUYO GENERAL and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Perseus Mining Limited, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Perseus Mining.
Diversification Opportunities for FUYO GENERAL and Perseus Mining
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FUYO and Perseus is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and Perseus Mining go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Perseus Mining
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.7 times more return on investment than Perseus Mining. However, FUYO GENERAL LEASE is 1.44 times less risky than Perseus Mining. It trades about 0.24 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.12 per unit of risk. If you would invest 6,400 in FUYO GENERAL LEASE on August 28, 2024 and sell it today you would earn a total of 450.00 from holding FUYO GENERAL LEASE or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Perseus Mining Limited
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Perseus Mining |
FUYO GENERAL and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Perseus Mining
The main advantage of trading using opposite FUYO GENERAL and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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