Correlation Between Perseus Mining and American States

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and American States 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 American States 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 American States Water, you can compare the effects of market volatilities on Perseus Mining and American States 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 American States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and American States.

Diversification Opportunities for Perseus Mining and American States

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Perseus and American is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water 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 American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of Perseus Mining i.e., Perseus Mining and American States go up and down completely randomly.

Pair Corralation between Perseus Mining and American States

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 2.07 times more return on investment than American States. However, Perseus Mining is 2.07 times more volatile than American States Water. It trades about 0.03 of its potential returns per unit of risk. American States Water is currently generating about 0.0 per unit of risk. If you would invest  129.00  in Perseus Mining Limited on September 12, 2024 and sell it today you would earn a total of  41.00  from holding Perseus Mining Limited or generate 31.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Perseus Mining Limited  vs.  American States Water

 Performance 
       Timeline  
Perseus Mining 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.
American States Water 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in American States Water are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, American States is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Perseus Mining and American States Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perseus Mining and American States

The main advantage of trading using opposite Perseus Mining and American States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, American States 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 American States will offset losses from the drop in American States' long position.
The idea behind Perseus Mining Limited and American States Water pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Commodity Directory
Find actively traded commodities issued by global exchanges
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios