Correlation Between Perseus Mining and Fastenal
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Fastenal 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 Fastenal 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 Fastenal Company, you can compare the effects of market volatilities on Perseus Mining and Fastenal 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 Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Fastenal.
Diversification Opportunities for Perseus Mining and Fastenal
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and Fastenal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Perseus Mining i.e., Perseus Mining and Fastenal go up and down completely randomly.
Pair Corralation between Perseus Mining and Fastenal
Assuming the 90 days horizon Perseus Mining is expected to generate 1.33 times less return on investment than Fastenal. In addition to that, Perseus Mining is 1.92 times more volatile than Fastenal Company. It trades about 0.03 of its total potential returns per unit of risk. Fastenal Company is currently generating about 0.08 per unit of volatility. If you would invest 4,547 in Fastenal Company on October 29, 2024 and sell it today you would earn a total of 2,693 from holding Fastenal Company or generate 59.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Fastenal Company
Performance |
| Timeline |
| Perseus Mining |
| Fastenal |
Perseus Mining and Fastenal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Fastenal
The main advantage of trading using opposite Perseus Mining and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Newmont | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. Origin Agritech |
| Fastenal vs. VULCAN MATERIALS | Fastenal vs. Aristocrat Leisure Limited | Fastenal vs. AIR PRODCHEMICALS | Fastenal vs. PLAYWAY SA ZY 10 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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