Correlation Between Perseus Mining and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and KAUFMAN ET 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 Perseus Mining and KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining Limited and KAUFMAN ET BROAD, you can compare the effects of market volatilities on Perseus Mining and KAUFMAN ET 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 Perseus Mining with a short position of KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and KAUFMAN ET.
Diversification Opportunities for Perseus Mining and KAUFMAN ET
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and KAUFMAN is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD and Perseus Mining 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 Perseus Mining Limited are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Perseus Mining i.e., Perseus Mining and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Perseus Mining and KAUFMAN ET
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the KAUFMAN ET. In addition to that, Perseus Mining is 1.36 times more volatile than KAUFMAN ET BROAD. It trades about -0.11 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about -0.06 per unit of volatility. If you would invest 3,265 in KAUFMAN ET BROAD on September 26, 2024 and sell it today you would lose (80.00) from holding KAUFMAN ET BROAD or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Perseus Mining |
| KAUFMAN ET BROAD |
Perseus Mining and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and KAUFMAN ET
The main advantage of trading using opposite Perseus Mining and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Newmont | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Franco Nevada |
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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