Correlation Between Perseus Mining and Meta Financial
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Meta Financial 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 Meta Financial 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 Meta Financial Group, you can compare the effects of market volatilities on Perseus Mining and Meta Financial 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 Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Meta Financial.
Diversification Opportunities for Perseus Mining and Meta Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Meta is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Perseus Mining i.e., Perseus Mining and Meta Financial go up and down completely randomly.
Pair Corralation between Perseus Mining and Meta Financial
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.08 times more return on investment than Meta Financial. However, Perseus Mining is 1.08 times more volatile than Meta Financial Group. It trades about 0.27 of its potential returns per unit of risk. Meta Financial Group is currently generating about 0.27 per unit of risk. If you would invest 155.00 in Perseus Mining Limited on November 5, 2024 and sell it today you would earn a total of 14.00 from holding Perseus Mining Limited or generate 9.03% 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. Meta Financial Group
Performance |
| Timeline |
| Perseus Mining |
| Meta Financial Group |
Perseus Mining and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Meta Financial
The main advantage of trading using opposite Perseus Mining and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| Perseus Mining vs. Safety Insurance Group | Perseus Mining vs. Cogent Communications Holdings | Perseus Mining vs. Goosehead Insurance | Perseus Mining vs. TELECOM ITALRISP ADR10 |
| Meta Financial vs. Addus HomeCare | Meta Financial vs. ADDUS HOMECARE | Meta Financial vs. Corporate Office Properties | Meta Financial vs. Autohome ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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