Correlation Between Perseus Mining and Autohome
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Autohome 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 Autohome 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 Autohome ADR, you can compare the effects of market volatilities on Perseus Mining and Autohome 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 Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Autohome.
Diversification Opportunities for Perseus Mining and Autohome
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Autohome is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR 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 Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of Perseus Mining i.e., Perseus Mining and Autohome go up and down completely randomly.
Pair Corralation between Perseus Mining and Autohome
Assuming the 90 days horizon Perseus Mining is expected to generate 1.98 times less return on investment than Autohome. But when comparing it to its historical volatility, Perseus Mining Limited is 2.49 times less risky than Autohome. It trades about 0.24 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Autohome ADR on November 4, 2024 and sell it today you would earn a total of 380.00 from holding Autohome ADR or generate 15.83% 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. Autohome ADR
Performance |
| Timeline |
| Perseus Mining |
| Autohome ADR |
Perseus Mining and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Autohome
The main advantage of trading using opposite Perseus Mining and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.| Perseus Mining vs. DENTSPLY SIRONA | Perseus Mining vs. BURLINGTON STORES | Perseus Mining vs. Mount Gibson Iron | Perseus Mining vs. Nippon Steel |
| Autohome vs. Alphabet Class A | Autohome vs. Alphabet Class A | Autohome vs. Alphabet | Autohome vs. Meta Platforms |
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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