Correlation Between Perseus Mining and Copa Holdings
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Copa Holdings 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 Copa Holdings 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 Copa Holdings SA, you can compare the effects of market volatilities on Perseus Mining and Copa Holdings 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 Copa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Copa Holdings.
Diversification Opportunities for Perseus Mining and Copa Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Copa is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Copa Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copa Holdings SA 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 Copa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copa Holdings SA has no effect on the direction of Perseus Mining i.e., Perseus Mining and Copa Holdings go up and down completely randomly.
Pair Corralation between Perseus Mining and Copa Holdings
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.6 times more return on investment than Copa Holdings. However, Perseus Mining is 1.6 times more volatile than Copa Holdings SA. It trades about 0.02 of its potential returns per unit of risk. Copa Holdings SA is currently generating about 0.02 per unit of risk. If you would invest 156.00 in Perseus Mining Limited on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Perseus Mining Limited or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.26% |
| Values | Daily Returns |
Perseus Mining Limited vs. Copa Holdings SA
Performance |
| Timeline |
| Perseus Mining |
| Copa Holdings SA |
Perseus Mining and Copa Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Copa Holdings
The main advantage of trading using opposite Perseus Mining and Copa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Copa Holdings 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 Copa Holdings will offset losses from the drop in Copa Holdings' long position.| Perseus Mining vs. Harmony Gold Mining | Perseus Mining vs. SPACE | Perseus Mining vs. T Rowe Price | Perseus Mining vs. Ampleforth |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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