Correlation Between Perseus Mining and Komatsu
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Komatsu 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 Komatsu 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 Komatsu, you can compare the effects of market volatilities on Perseus Mining and Komatsu 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 Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Komatsu.
Diversification Opportunities for Perseus Mining and Komatsu
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and Komatsu is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu 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 Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Perseus Mining i.e., Perseus Mining and Komatsu go up and down completely randomly.
Pair Corralation between Perseus Mining and Komatsu
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.57 times more return on investment than Komatsu. However, Perseus Mining is 1.57 times more volatile than Komatsu. It trades about 0.18 of its potential returns per unit of risk. Komatsu is currently generating about 0.14 per unit of risk. If you would invest 150.00 in Perseus Mining Limited on September 15, 2024 and sell it today you would earn a total of 14.00 from holding Perseus Mining Limited or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Perseus Mining Limited vs. Komatsu
Performance |
| Timeline |
| Perseus Mining |
| Komatsu |
Perseus Mining and Komatsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Komatsu
The main advantage of trading using opposite Perseus Mining and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.| Perseus Mining vs. United Insurance Holdings | Perseus Mining vs. Strategic Education | Perseus Mining vs. UNITED RENTALS | Perseus Mining vs. Zurich Insurance Group |
| Komatsu vs. Shenandoah Telecommunications | Komatsu vs. Addus HomeCare | Komatsu vs. Tower One Wireless | Komatsu vs. Major Drilling Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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