Correlation Between Perseus Mining and Granite Construction
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Granite Construction 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 Granite Construction 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 Granite Construction, you can compare the effects of market volatilities on Perseus Mining and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Granite Construction.
Diversification Opportunities for Perseus Mining and Granite Construction
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Granite is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of Perseus Mining i.e., Perseus Mining and Granite Construction go up and down completely randomly.
Pair Corralation between Perseus Mining and Granite Construction
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Granite Construction. In addition to that, Perseus Mining is 1.13 times more volatile than Granite Construction. It trades about -0.04 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.01 per unit of volatility. If you would invest 8,886 in Granite Construction on October 17, 2024 and sell it today you would earn a total of 14.00 from holding Granite Construction or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Granite Construction
Performance |
| Timeline |
| Perseus Mining |
| Granite Construction |
Perseus Mining and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Granite Construction
The main advantage of trading using opposite Perseus Mining and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| Perseus Mining vs. Computershare Limited | Perseus Mining vs. Hemisphere Energy Corp | Perseus Mining vs. United Utilities Group | Perseus Mining vs. Hua Hong Semiconductor |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |