Correlation Between Perseus Mining and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and NMI Holdings 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 NMI Holdings 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 NMI Holdings, you can compare the effects of market volatilities on Perseus Mining and NMI Holdings 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 NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and NMI Holdings.
Diversification Opportunities for Perseus Mining and NMI Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perseus and NMI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings 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 NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of Perseus Mining i.e., Perseus Mining and NMI Holdings go up and down completely randomly.
Pair Corralation between Perseus Mining and NMI Holdings
Assuming the 90 days horizon Perseus Mining is expected to generate 1.33 times less return on investment than NMI Holdings. In addition to that, Perseus Mining is 1.76 times more volatile than NMI Holdings. It trades about 0.03 of its total potential returns per unit of risk. NMI Holdings is currently generating about 0.08 per unit of volatility. If you would invest 2,160 in NMI Holdings on October 31, 2024 and sell it today you would earn a total of 1,580 from holding NMI Holdings or generate 73.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. NMI Holdings
Performance |
| Timeline |
| Perseus Mining |
| NMI Holdings |
Perseus Mining and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and NMI Holdings
The main advantage of trading using opposite Perseus Mining and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, NMI Holdings 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 NMI Holdings will offset losses from the drop in NMI Holdings' long position.| Perseus Mining vs. betterU Education Corp | Perseus Mining vs. HUTCHISON TELECOMM | Perseus Mining vs. ecotel communication ag | Perseus Mining vs. DeVry Education Group |
| NMI Holdings vs. OPKO HEALTH | NMI Holdings vs. Singapore Telecommunications Limited | NMI Holdings vs. Telecom Argentina SA | NMI Holdings vs. Molina Healthcare |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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