Correlation Between Perseus Mining and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Sterling Construction 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 Sterling Construction 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 Sterling Construction, you can compare the effects of market volatilities on Perseus Mining and Sterling Construction 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 Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Sterling Construction.
Diversification Opportunities for Perseus Mining and Sterling Construction
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Sterling is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction 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 Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of Perseus Mining i.e., Perseus Mining and Sterling Construction go up and down completely randomly.
Pair Corralation between Perseus Mining and Sterling Construction
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.53 times more return on investment than Sterling Construction. However, Perseus Mining Limited is 1.88 times less risky than Sterling Construction. It trades about 0.07 of its potential returns per unit of risk. Sterling Construction is currently generating about -0.02 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Sterling Construction
Performance |
| Timeline |
| Perseus Mining |
| Sterling Construction |
Perseus Mining and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Sterling Construction
The main advantage of trading using opposite Perseus Mining and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Sterling Construction 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 Sterling Construction will offset losses from the drop in Sterling Construction'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 |
| Sterling Construction vs. Japan Medical Dynamic | Sterling Construction vs. CEOTRONICS | Sterling Construction vs. LANDSEA GREEN MANAGEMENT | Sterling Construction vs. Marie Brizard Wine |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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