Correlation Between Perseus Mining and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and THORNEY TECHS 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 THORNEY TECHS 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 THORNEY TECHS LTD, you can compare the effects of market volatilities on Perseus Mining and THORNEY TECHS 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 THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and THORNEY TECHS.
Diversification Opportunities for Perseus Mining and THORNEY TECHS
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perseus and THORNEY is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD 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 THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of Perseus Mining i.e., Perseus Mining and THORNEY TECHS go up and down completely randomly.
Pair Corralation between Perseus Mining and THORNEY TECHS
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.4 times more return on investment than THORNEY TECHS. However, Perseus Mining Limited is 2.5 times less risky than THORNEY TECHS. It trades about 0.07 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about -0.01 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. THORNEY TECHS LTD
Performance |
| Timeline |
| Perseus Mining |
| THORNEY TECHS LTD |
Perseus Mining and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and THORNEY TECHS
The main advantage of trading using opposite Perseus Mining and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS'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 |
| THORNEY TECHS vs. Alliance Data Systems | THORNEY TECHS vs. COMPUTERSHARE | THORNEY TECHS vs. Align Technology | THORNEY TECHS vs. Vishay Intertechnology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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