Correlation Between Perseus Mining and United Fire
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and United Fire 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 United Fire 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 United Fire Group, you can compare the effects of market volatilities on Perseus Mining and United Fire 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 United Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and United Fire.
Diversification Opportunities for Perseus Mining and United Fire
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and United is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and United Fire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Fire Group 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 United Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Fire Group has no effect on the direction of Perseus Mining i.e., Perseus Mining and United Fire go up and down completely randomly.
Pair Corralation between Perseus Mining and United Fire
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the United Fire. But the pink sheet apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 1.42 times less risky than United Fire. The pink sheet trades about -0.05 of its potential returns per unit of risk. The United Fire Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,009 in United Fire Group on August 28, 2024 and sell it today you would earn a total of 993.00 from holding United Fire Group or generate 49.43% 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. United Fire Group
Performance |
| Timeline |
| Perseus Mining |
| United Fire Group |
Perseus Mining and United Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and United Fire
The main advantage of trading using opposite Perseus Mining and United Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, United Fire 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 United Fire will offset losses from the drop in United Fire's long position.| Perseus Mining vs. Aurion Resources | Perseus Mining vs. Liberty Gold Corp | Perseus Mining vs. Orezone Gold Corp | Perseus Mining vs. Fortuna Silver Mines |
| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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