Correlation Between Perseus Mining and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Perseus Mining and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Postal Savings.
Diversification Opportunities for Perseus Mining and Postal Savings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Postal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Perseus Mining i.e., Perseus Mining and Postal Savings go up and down completely randomly.
Pair Corralation between Perseus Mining and Postal Savings
Assuming the 90 days horizon Perseus Mining is expected to generate 6.35 times less return on investment than Postal Savings. But when comparing it to its historical volatility, Perseus Mining Limited is 2.49 times less risky than Postal Savings. It trades about 0.03 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.39 in Postal Savings Bank on August 27, 2024 and sell it today you would earn a total of 46.61 from holding Postal Savings Bank or generate 630.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Postal Savings Bank
Performance |
| Timeline |
| Perseus Mining |
| Postal Savings Bank |
Perseus Mining and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Postal Savings
The main advantage of trading using opposite Perseus Mining and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Perseus Mining vs. PLAYTIKA HOLDING DL 01 | Perseus Mining vs. PLAY2CHILL SA ZY | Perseus Mining vs. SAFETY MEDICAL PROD | Perseus Mining vs. Playtech plc |
| Postal Savings vs. Singapore Airlines Limited | Postal Savings vs. FLOW TRADERS LTD | Postal Savings vs. AEGEAN AIRLINES | Postal Savings vs. International Consolidated Airlines |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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