Correlation Between Perseus Mining and Microsoft
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Perseus Mining and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Microsoft.
Diversification Opportunities for Perseus Mining and Microsoft
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Microsoft is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Perseus Mining i.e., Perseus Mining and Microsoft go up and down completely randomly.
Pair Corralation between Perseus Mining and Microsoft
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Microsoft. In addition to that, Perseus Mining is 1.1 times more volatile than Microsoft. It trades about -0.12 of its total potential returns per unit of risk. Microsoft is currently generating about 0.02 per unit of volatility. If you would invest 39,432 in Microsoft on August 28, 2024 and sell it today you would earn a total of 233.00 from holding Microsoft or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Microsoft
Performance |
| Timeline |
| Perseus Mining |
| Microsoft |
Perseus Mining and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Microsoft
The main advantage of trading using opposite Perseus Mining and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Perseus Mining vs. HEALTHCARE REAL A | Perseus Mining vs. GUARDANT HEALTH CL | Perseus Mining vs. AUST AGRICULTURAL | Perseus Mining vs. Bumrungrad Hospital Public |
| Microsoft vs. AGF Management Limited | Microsoft vs. CHINA EDUCATION GROUP | Microsoft vs. DeVry Education Group | Microsoft vs. Brockhaus Capital Management |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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