Correlation Between Perseus Mining and SGS SA
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and SGS SA 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 SGS SA 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 SGS SA, you can compare the effects of market volatilities on Perseus Mining and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and SGS SA.
Diversification Opportunities for Perseus Mining and SGS SA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and SGS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Perseus Mining i.e., Perseus Mining and SGS SA go up and down completely randomly.
Pair Corralation between Perseus Mining and SGS SA
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 2.51 times more return on investment than SGS SA. However, Perseus Mining is 2.51 times more volatile than SGS SA. It trades about -0.08 of its potential returns per unit of risk. SGS SA is currently generating about -0.22 per unit of risk. If you would invest 183.00 in Perseus Mining Limited on September 4, 2024 and sell it today you would lose (15.00) from holding Perseus Mining Limited or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. SGS SA
Performance |
| Timeline |
| Perseus Mining |
| SGS SA |
Perseus Mining and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and SGS SA
The main advantage of trading using opposite Perseus Mining and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Liberty Gold Corp | Perseus Mining vs. Rio2 Limited | Perseus Mining vs. Orezone Gold Corp |
| SGS SA vs. Valens | SGS SA vs. Perseus Mining Limited | SGS SA vs. Vishay Intertechnology | SGS SA vs. MagnaChip Semiconductor |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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