Correlation Between Perseus Mining and MEITUAN UNSPADR/2B
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR2B, you can compare the effects of market volatilities on Perseus Mining and MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and MEITUAN UNSPADR/2B.
Diversification Opportunities for Perseus Mining and MEITUAN UNSPADR/2B
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perseus and MEITUAN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and MEITUAN UNSPADR2B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITUAN UNSPADR/2B has no effect on the direction of Perseus Mining i.e., Perseus Mining and MEITUAN UNSPADR/2B go up and down completely randomly.
Pair Corralation between Perseus Mining and MEITUAN UNSPADR/2B
Assuming the 90 days horizon Perseus Mining is expected to generate 11.19 times less return on investment than MEITUAN UNSPADR/2B. But when comparing it to its historical volatility, Perseus Mining Limited is 1.92 times less risky than MEITUAN UNSPADR/2B. It trades about 0.03 of its potential returns per unit of risk. MEITUAN UNSPADR2B is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,460 in MEITUAN UNSPADR2B on August 28, 2024 and sell it today you would earn a total of 1,440 from holding MEITUAN UNSPADR2B or generate 58.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. MEITUAN UNSPADR2B
Performance |
| Timeline |
| Perseus Mining |
| MEITUAN UNSPADR/2B |
Perseus Mining and MEITUAN UNSPADR/2B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and MEITUAN UNSPADR/2B
The main advantage of trading using opposite Perseus Mining and MEITUAN UNSPADR/2B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B will offset losses from the drop in MEITUAN UNSPADR/2B's long position.| Perseus Mining vs. HEALTHCARE REAL A | Perseus Mining vs. GUARDANT HEALTH CL | Perseus Mining vs. AUST AGRICULTURAL | Perseus Mining vs. Bumrungrad Hospital Public |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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