Correlation Between Perseus Mining and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Playa Hotels 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 Playa Hotels 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 Playa Hotels Resorts, you can compare the effects of market volatilities on Perseus Mining and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Playa Hotels.
Diversification Opportunities for Perseus Mining and Playa Hotels
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perseus and Playa is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Perseus Mining i.e., Perseus Mining and Playa Hotels go up and down completely randomly.
Pair Corralation between Perseus Mining and Playa Hotels
Assuming the 90 days horizon Perseus Mining is expected to generate 1.35 times less return on investment than Playa Hotels. In addition to that, Perseus Mining is 1.46 times more volatile than Playa Hotels Resorts. It trades about 0.03 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.05 per unit of volatility. If you would invest 580.00 in Playa Hotels Resorts on August 25, 2024 and sell it today you would earn a total of 330.00 from holding Playa Hotels Resorts or generate 56.9% 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. Playa Hotels Resorts
Performance |
| Timeline |
| Perseus Mining |
| Playa Hotels Resorts |
Perseus Mining and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Playa Hotels
The main advantage of trading using opposite Perseus Mining and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Agnico Eagle Mines | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| Playa Hotels vs. Sporttotal AG | Playa Hotels vs. Zijin Mining Group | Playa Hotels vs. Perseus Mining Limited | Playa Hotels vs. DICKS Sporting Goods |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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