Correlation Between Perseus Mining and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and INDOFOOD AGRI 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 INDOFOOD AGRI 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 INDOFOOD AGRI RES, you can compare the effects of market volatilities on Perseus Mining and INDOFOOD AGRI 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 INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and INDOFOOD AGRI.
Diversification Opportunities for Perseus Mining and INDOFOOD AGRI
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perseus and INDOFOOD is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and INDOFOOD AGRI RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOFOOD AGRI RES 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 INDOFOOD AGRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOFOOD AGRI RES has no effect on the direction of Perseus Mining i.e., Perseus Mining and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between Perseus Mining and INDOFOOD AGRI
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.04 times more return on investment than INDOFOOD AGRI. However, Perseus Mining is 1.04 times more volatile than INDOFOOD AGRI RES. It trades about 0.08 of its potential returns per unit of risk. INDOFOOD AGRI RES is currently generating about 0.05 per unit of risk. If you would invest 109.00 in Perseus Mining Limited on August 25, 2024 and sell it today you would earn a total of 53.00 from holding Perseus Mining Limited or generate 48.62% 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. INDOFOOD AGRI RES
Performance |
| Timeline |
| Perseus Mining |
| INDOFOOD AGRI RES |
Perseus Mining and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and INDOFOOD AGRI
The main advantage of trading using opposite Perseus Mining and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, INDOFOOD AGRI 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 INDOFOOD AGRI will offset losses from the drop in INDOFOOD AGRI's long position.| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Agnico Eagle Mines | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| INDOFOOD AGRI vs. SBA Communications Corp | INDOFOOD AGRI vs. SK TELECOM TDADR | INDOFOOD AGRI vs. Singapore Telecommunications Limited | INDOFOOD AGRI vs. Shenandoah Telecommunications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |