Correlation Between Perseus Mining and HEIA
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and HEIA 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 HEIA 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 HEIA, you can compare the effects of market volatilities on Perseus Mining and HEIA 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 HEIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and HEIA.
Diversification Opportunities for Perseus Mining and HEIA
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perseus and HEIA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and HEIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEIA 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 HEIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEIA has no effect on the direction of Perseus Mining i.e., Perseus Mining and HEIA go up and down completely randomly.
Pair Corralation between Perseus Mining and HEIA
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 2.23 times more return on investment than HEIA. However, Perseus Mining is 2.23 times more volatile than HEIA. It trades about 0.05 of its potential returns per unit of risk. HEIA is currently generating about 0.11 per unit of risk. If you would invest 107.00 in Perseus Mining Limited on September 4, 2024 and sell it today you would earn a total of 54.00 from holding Perseus Mining Limited or generate 50.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.47% |
| Values | Daily Returns |
Perseus Mining Limited vs. HEIA
Performance |
| Timeline |
| Perseus Mining |
| HEIA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Perseus Mining and HEIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and HEIA
The main advantage of trading using opposite Perseus Mining and HEIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, HEIA 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 HEIA will offset losses from the drop in HEIA's long position.| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| HEIA vs. Japan Tobacco | HEIA vs. Aegean Airlines SA | HEIA vs. Corporate Office Properties | HEIA vs. MTI WIRELESS EDGE |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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