Correlation Between Perseus Mining and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and LEWAG HOLDING 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 LEWAG HOLDING 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 LEWAG HOLDING AG, you can compare the effects of market volatilities on Perseus Mining and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and LEWAG HOLDING.
Diversification Opportunities for Perseus Mining and LEWAG HOLDING
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and LEWAG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of Perseus Mining i.e., Perseus Mining and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between Perseus Mining and LEWAG HOLDING
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 2.22 times more return on investment than LEWAG HOLDING. However, Perseus Mining is 2.22 times more volatile than LEWAG HOLDING AG. It trades about 0.05 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.07 per unit of risk. If you would invest 141.00 in Perseus Mining Limited on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Perseus Mining Limited or generate 14.18% 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. LEWAG HOLDING AG
Performance |
| Timeline |
| Perseus Mining |
| LEWAG HOLDING AG |
Perseus Mining and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and LEWAG HOLDING
The main advantage of trading using opposite Perseus Mining and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING'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 |
| LEWAG HOLDING vs. REGAL HOTEL INTL | LEWAG HOLDING vs. Bausch Health Companies | LEWAG HOLDING vs. YOOMA WELLNESS INC | LEWAG HOLDING vs. Diamondrock Hospitality Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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