Correlation Between Perseus Mining and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and MAG SILVER 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 MAG SILVER 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 MAG SILVER, you can compare the effects of market volatilities on Perseus Mining and MAG SILVER 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 MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and MAG SILVER.
Diversification Opportunities for Perseus Mining and MAG SILVER
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perseus and MAG is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER 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 MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of Perseus Mining i.e., Perseus Mining and MAG SILVER go up and down completely randomly.
Pair Corralation between Perseus Mining and MAG SILVER
Assuming the 90 days horizon Perseus Mining is expected to generate 2.82 times less return on investment than MAG SILVER. But when comparing it to its historical volatility, Perseus Mining Limited is 1.97 times less risky than MAG SILVER. It trades about 0.19 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,315 in MAG SILVER on November 3, 2024 and sell it today you would earn a total of 268.00 from holding MAG SILVER or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. MAG SILVER
Performance |
| Timeline |
| Perseus Mining |
| MAG SILVER |
Perseus Mining and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and MAG SILVER
The main advantage of trading using opposite Perseus Mining and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, MAG SILVER 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 MAG SILVER will offset losses from the drop in MAG SILVER's long position.| Perseus Mining vs. Sunny Optical Technology | Perseus Mining vs. KOBE STEEL LTD | Perseus Mining vs. TOMBADOR IRON LTD | Perseus Mining vs. Olympic Steel |
| MAG SILVER vs. Tsingtao Brewery | MAG SILVER vs. Suntory Beverage Food | MAG SILVER vs. Sumitomo Rubber Industries | MAG SILVER vs. Plastic Omnium |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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