Correlation Between Perseus Mining and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Lululemon Athletica 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 Lululemon Athletica 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 Lululemon Athletica, you can compare the effects of market volatilities on Perseus Mining and Lululemon Athletica 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 Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Lululemon Athletica.
Diversification Opportunities for Perseus Mining and Lululemon Athletica
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perseus and Lululemon is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica 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 Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of Perseus Mining i.e., Perseus Mining and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Perseus Mining and Lululemon Athletica
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.42 times more return on investment than Lululemon Athletica. However, Perseus Mining is 1.42 times more volatile than Lululemon Athletica. It trades about 0.03 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.0 per unit of risk. If you would invest 146.00 in Perseus Mining Limited on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Perseus Mining Limited or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.38% |
| Values | Daily Returns |
Perseus Mining Limited vs. Lululemon Athletica
Performance |
| Timeline |
| Perseus Mining |
| Lululemon Athletica |
Perseus Mining and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Lululemon Athletica
The main advantage of trading using opposite Perseus Mining and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica's long position.| Perseus Mining vs. Vertiv Holdings Co | Perseus Mining vs. Nasdaq Inc | Perseus Mining vs. McDonalds | Perseus Mining vs. Walmart |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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