Correlation Between Perseus Mining and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Meiko Electronics 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 Meiko Electronics 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 Meiko Electronics Co, you can compare the effects of market volatilities on Perseus Mining and Meiko Electronics 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 Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Meiko Electronics.
Diversification Opportunities for Perseus Mining and Meiko Electronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perseus and Meiko is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko 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 Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of Perseus Mining i.e., Perseus Mining and Meiko Electronics go up and down completely randomly.
Pair Corralation between Perseus Mining and Meiko Electronics
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.97 times more return on investment than Meiko Electronics. However, Perseus Mining Limited is 1.03 times less risky than Meiko Electronics. It trades about -0.05 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.21 per unit of risk. If you would invest 160.00 in Perseus Mining Limited on October 15, 2024 and sell it today you would lose (2.00) from holding Perseus Mining Limited or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Meiko Electronics Co
Performance |
| Timeline |
| Perseus Mining |
| Meiko Electronics |
Perseus Mining and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Meiko Electronics
The main advantage of trading using opposite Perseus Mining and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Meiko Electronics 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| Perseus Mining vs. CHRYSALIS INVESTMENTS LTD | Perseus Mining vs. SEI INVESTMENTS | Perseus Mining vs. PICKN PAY STORES | Perseus Mining vs. MidCap Financial Investment |
| Meiko Electronics vs. CARSALESCOM | Meiko Electronics vs. STEEL DYNAMICS | Meiko Electronics vs. Lamar Advertising | Meiko Electronics vs. Sch Environnement SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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