Correlation Between Perseus Mining and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Perseus Mining and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and LPKF Laser.
Diversification Opportunities for Perseus Mining and LPKF Laser
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and LPKF is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Perseus Mining i.e., Perseus Mining and LPKF Laser go up and down completely randomly.
Pair Corralation between Perseus Mining and LPKF Laser
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.85 times more return on investment than LPKF Laser. However, Perseus Mining Limited is 1.18 times less risky than LPKF Laser. It trades about 0.05 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.04 per unit of risk. If you would invest 150.00 in Perseus Mining Limited on November 2, 2024 and sell it today you would earn a total of 17.00 from holding Perseus Mining Limited or generate 11.33% 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. LPKF Laser Electronics
Performance |
| Timeline |
| Perseus Mining |
| LPKF Laser Electronics |
Perseus Mining and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and LPKF Laser
The main advantage of trading using opposite Perseus Mining and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Perseus Mining vs. EPSILON HEALTHCARE LTD | Perseus Mining vs. Universal Health Realty | Perseus Mining vs. OPKO HEALTH | Perseus Mining vs. BOSTON BEER A |
| LPKF Laser vs. Honeywell International | LPKF Laser vs. Illinois Tool Works | LPKF Laser vs. Eaton PLC | LPKF Laser vs. Trane Technologies plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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