Correlation Between Perseus Mining and Star Diamond
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Star Diamond 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 Star Diamond 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 Star Diamond, you can compare the effects of market volatilities on Perseus Mining and Star Diamond 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 Star Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Star Diamond.
Diversification Opportunities for Perseus Mining and Star Diamond
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Star is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Star Diamond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Diamond 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 Star Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Diamond has no effect on the direction of Perseus Mining i.e., Perseus Mining and Star Diamond go up and down completely randomly.
Pair Corralation between Perseus Mining and Star Diamond
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Star Diamond. But the stock apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 13.31 times less risky than Star Diamond. The stock trades about -0.12 of its potential returns per unit of risk. The Star Diamond is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.85 in Star Diamond on August 28, 2024 and sell it today you would lose (0.80) from holding Star Diamond or give up 43.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Star Diamond
Performance |
| Timeline |
| Perseus Mining |
| Star Diamond |
Perseus Mining and Star Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Star Diamond
The main advantage of trading using opposite Perseus Mining and Star Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Star Diamond 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 Star Diamond will offset losses from the drop in Star Diamond'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 |
| Star Diamond vs. Superior Plus Corp | Star Diamond vs. NMI Holdings | Star Diamond vs. Origin Agritech | Star Diamond vs. SIVERS SEMICONDUCTORS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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