Correlation Between Perseus Mining and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on Perseus Mining and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Goldman Sachs.
Diversification Opportunities for Perseus Mining and Goldman Sachs
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and Goldman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Perseus Mining i.e., Perseus Mining and Goldman Sachs go up and down completely randomly.
Pair Corralation between Perseus Mining and Goldman Sachs
Assuming the 90 days horizon Perseus Mining is expected to generate 1.7 times less return on investment than Goldman Sachs. In addition to that, Perseus Mining is 1.72 times more volatile than The Goldman Sachs. It trades about 0.03 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.08 per unit of volatility. If you would invest 32,478 in The Goldman Sachs on August 29, 2024 and sell it today you would earn a total of 24,952 from holding The Goldman Sachs or generate 76.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. The Goldman Sachs
Performance |
| Timeline |
| Perseus Mining |
| Goldman Sachs |
Perseus Mining and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Goldman Sachs
The main advantage of trading using opposite Perseus Mining and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Agnico Eagle Mines | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| Goldman Sachs vs. CDL INVESTMENT | Goldman Sachs vs. PennantPark Investment | Goldman Sachs vs. Chuangs China Investments | Goldman Sachs vs. Perseus Mining Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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