Correlation Between Perseus Mining and American States
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Perseus Mining Limited vs. American States Water
Performance |
Timeline |
Perseus Mining |
American States Water |
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.Perseus Mining vs. Vastned Retail NV | Perseus Mining vs. MARKET VECTR RETAIL | Perseus Mining vs. Carsales | Perseus Mining vs. QURATE RETAIL INC |
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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.
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