Correlation Between Perseus Mining and TELECOM ITALIA
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and TELECOM ITALIA 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 TELECOM ITALIA 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 TELECOM ITALIA, you can compare the effects of market volatilities on Perseus Mining and TELECOM ITALIA 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 TELECOM ITALIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and TELECOM ITALIA.
Diversification Opportunities for Perseus Mining and TELECOM ITALIA
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perseus and TELECOM is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA 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 TELECOM ITALIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM ITALIA has no effect on the direction of Perseus Mining i.e., Perseus Mining and TELECOM ITALIA go up and down completely randomly.
Pair Corralation between Perseus Mining and TELECOM ITALIA
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.61 times more return on investment than TELECOM ITALIA. However, Perseus Mining Limited is 1.63 times less risky than TELECOM ITALIA. It trades about 0.34 of its potential returns per unit of risk. TELECOM ITALIA is currently generating about 0.17 per unit of risk. If you would invest 152.00 in Perseus Mining Limited on October 30, 2024 and sell it today you would earn a total of 16.00 from holding Perseus Mining Limited or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. TELECOM ITALIA
Performance |
| Timeline |
| Perseus Mining |
| TELECOM ITALIA |
Perseus Mining and TELECOM ITALIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and TELECOM ITALIA
The main advantage of trading using opposite Perseus Mining and TELECOM ITALIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, TELECOM ITALIA 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 TELECOM ITALIA will offset losses from the drop in TELECOM ITALIA's 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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