Correlation Between Perseus Mining and Old Republic
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Old Republic 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 Old Republic 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 Old Republic International, you can compare the effects of market volatilities on Perseus Mining and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Old Republic.
Diversification Opportunities for Perseus Mining and Old Republic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and Old is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Perseus Mining i.e., Perseus Mining and Old Republic go up and down completely randomly.
Pair Corralation between Perseus Mining and Old Republic
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Old Republic. In addition to that, Perseus Mining is 3.4 times more volatile than Old Republic International. It trades about -0.08 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.39 per unit of volatility. If you would invest 3,529 in Old Republic International on August 31, 2024 and sell it today you would earn a total of 368.00 from holding Old Republic International or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Perseus Mining Limited vs. Old Republic International
Performance |
| Timeline |
| Perseus Mining |
| Old Republic Interna |
Perseus Mining and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Old Republic
The main advantage of trading using opposite Perseus Mining and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Rio2 Limited | Perseus Mining vs. Palamina Corp | Perseus Mining vs. BTU Metals Corp |
| Old Republic vs. Selective Insurance Group | Old Republic vs. Aquagold International | Old Republic vs. Thrivent High Yield | Old Republic vs. Morningstar Unconstrained Allocation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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