Correlation Between Perseus Mining and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Gelsenwasser 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 Gelsenwasser 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 Gelsenwasser AG, you can compare the effects of market volatilities on Perseus Mining and Gelsenwasser 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 Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Gelsenwasser.
Diversification Opportunities for Perseus Mining and Gelsenwasser
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perseus and Gelsenwasser is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG 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 Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Perseus Mining i.e., Perseus Mining and Gelsenwasser go up and down completely randomly.
Pair Corralation between Perseus Mining and Gelsenwasser
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Gelsenwasser. But the stock apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 1.56 times less risky than Gelsenwasser. The stock trades about -0.04 of its potential returns per unit of risk. The Gelsenwasser AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 50,500 in Gelsenwasser AG on August 27, 2024 and sell it today you would earn a total of 2,000 from holding Gelsenwasser AG or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Gelsenwasser AG
Performance |
| Timeline |
| Perseus Mining |
| Gelsenwasser AG |
Perseus Mining and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Gelsenwasser
The main advantage of trading using opposite Perseus Mining and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser'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 |
| Gelsenwasser vs. Perseus Mining Limited | Gelsenwasser vs. REINET INVESTMENTS SCA | Gelsenwasser vs. Jacquet Metal Service | Gelsenwasser vs. SERI INDUSTRIAL EO |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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