Correlation Between Perseus Mining and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on Perseus Mining and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Grocery Outlet.
Diversification Opportunities for Perseus Mining and Grocery Outlet
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Grocery is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Perseus Mining i.e., Perseus Mining and Grocery Outlet go up and down completely randomly.
Pair Corralation between Perseus Mining and Grocery Outlet
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Grocery Outlet. In addition to that, Perseus Mining is 1.12 times more volatile than Grocery Outlet Holding. It trades about -0.09 of its total potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.54 per unit of volatility. If you would invest 1,441 in Grocery Outlet Holding on September 3, 2024 and sell it today you would earn a total of 659.00 from holding Grocery Outlet Holding or generate 45.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Grocery Outlet Holding
Performance |
| Timeline |
| Perseus Mining |
| Grocery Outlet Holding |
Perseus Mining and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Grocery Outlet
The main advantage of trading using opposite Perseus Mining and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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