Correlation Between Perseus Mining and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and MAGNA INTL 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 MAGNA INTL 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 MAGNA INTL, you can compare the effects of market volatilities on Perseus Mining and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and MAGNA INTL.
Diversification Opportunities for Perseus Mining and MAGNA INTL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perseus and MAGNA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of Perseus Mining i.e., Perseus Mining and MAGNA INTL go up and down completely randomly.
Pair Corralation between Perseus Mining and MAGNA INTL
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.14 times more return on investment than MAGNA INTL. However, Perseus Mining is 1.14 times more volatile than MAGNA INTL. It trades about 0.22 of its potential returns per unit of risk. MAGNA INTL is currently generating about 0.06 per unit of risk. If you would invest 152.00 in Perseus Mining Limited on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Perseus Mining Limited or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Perseus Mining Limited vs. MAGNA INTL
Performance |
| Timeline |
| Perseus Mining |
| MAGNA INTL |
Perseus Mining and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and MAGNA INTL
The main advantage of trading using opposite Perseus Mining and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL's long position.| Perseus Mining vs. Boyd Gaming | Perseus Mining vs. CI GAMES SA | Perseus Mining vs. GameStop Corp | Perseus Mining vs. ULTRA CLEAN HLDGS |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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