Correlation Between Perseus Mining and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Perseus Mining and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Universal Entertainment.
Diversification Opportunities for Perseus Mining and Universal Entertainment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Universal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Perseus Mining i.e., Perseus Mining and Universal Entertainment go up and down completely randomly.
Pair Corralation between Perseus Mining and Universal Entertainment
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.37 times more return on investment than Universal Entertainment. However, Perseus Mining Limited is 2.69 times less risky than Universal Entertainment. It trades about -0.12 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.11 per unit of risk. If you would invest 171.00 in Perseus Mining Limited on August 28, 2024 and sell it today you would lose (9.00) from holding Perseus Mining Limited or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Universal Entertainment
Performance |
| Timeline |
| Perseus Mining |
| Universal Entertainment |
Perseus Mining and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Universal Entertainment
The main advantage of trading using opposite Perseus Mining and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment'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 |
| Universal Entertainment vs. COPLAND ROAD CAPITAL | Universal Entertainment vs. Broadwind | Universal Entertainment vs. CarsalesCom | Universal Entertainment vs. TRAINLINE PLC LS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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