Correlation Between Perseus Mining and Mitsui Chemicals
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Mitsui Chemicals 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 Mitsui Chemicals 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 Mitsui Chemicals, you can compare the effects of market volatilities on Perseus Mining and Mitsui Chemicals 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 Mitsui Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Mitsui Chemicals.
Diversification Opportunities for Perseus Mining and Mitsui Chemicals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and Mitsui is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Mitsui Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Chemicals 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 Mitsui Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Chemicals has no effect on the direction of Perseus Mining i.e., Perseus Mining and Mitsui Chemicals go up and down completely randomly.
Pair Corralation between Perseus Mining and Mitsui Chemicals
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.28 times more return on investment than Mitsui Chemicals. However, Perseus Mining is 1.28 times more volatile than Mitsui Chemicals. It trades about 0.07 of its potential returns per unit of risk. Mitsui Chemicals is currently generating about -0.08 per unit of risk. If you would invest 161.00 in Perseus Mining Limited on October 30, 2024 and sell it today you would earn a total of 7.00 from holding Perseus Mining Limited or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Mitsui Chemicals
Performance |
| Timeline |
| Perseus Mining |
| Mitsui Chemicals |
Perseus Mining and Mitsui Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Mitsui Chemicals
The main advantage of trading using opposite Perseus Mining and Mitsui Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Mitsui Chemicals 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 Mitsui Chemicals will offset losses from the drop in Mitsui Chemicals' long position.| Perseus Mining vs. Aya Gold Silver | Perseus Mining vs. Harmony Gold Mining | Perseus Mining vs. DFS Furniture PLC | Perseus Mining vs. Aedas Homes SA |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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