Correlation Between KOBE STEEL and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both KOBE STEEL 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 KOBE STEEL and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOBE STEEL LTD and Perseus Mining Limited, you can compare the effects of market volatilities on KOBE STEEL 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 KOBE STEEL with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and Perseus Mining.
Diversification Opportunities for KOBE STEEL and Perseus Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KOBE and Perseus is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and KOBE STEEL 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 KOBE STEEL LTD 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 KOBE STEEL i.e., KOBE STEEL and Perseus Mining go up and down completely randomly.
Pair Corralation between KOBE STEEL and Perseus Mining
Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.8 times more return on investment than Perseus Mining. However, KOBE STEEL LTD is 1.26 times less risky than Perseus Mining. It trades about 0.07 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 485.00 in KOBE STEEL LTD on October 29, 2024 and sell it today you would earn a total of 492.00 from holding KOBE STEEL LTD or generate 101.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOBE STEEL LTD vs. Perseus Mining Limited
Performance |
| Timeline |
| KOBE STEEL LTD |
| Perseus Mining |
KOBE STEEL and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOBE STEEL and Perseus Mining
The main advantage of trading using opposite KOBE STEEL and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL 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.| KOBE STEEL vs. SILVER BULLET DATA | KOBE STEEL vs. Wizz Air Holdings | KOBE STEEL vs. Northern Data AG | KOBE STEEL vs. CN DATANG C |
| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Newmont | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. Origin Agritech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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