Correlation Between Perseus Mining and ARN Media
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and ARN Media 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 ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and ARN Media Limited, you can compare the effects of market volatilities on Perseus Mining and ARN Media 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 ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and ARN Media.
Diversification Opportunities for Perseus Mining and ARN Media
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perseus and ARN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited 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 are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Perseus Mining i.e., Perseus Mining and ARN Media go up and down completely randomly.
Pair Corralation between Perseus Mining and ARN Media
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.0 times more return on investment than ARN Media. However, Perseus Mining is 1.0 times more volatile than ARN Media Limited. It trades about 0.13 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.14 per unit of risk. If you would invest 273.00 in Perseus Mining on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Perseus Mining or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. ARN Media Limited
Performance |
| Timeline |
| Perseus Mining |
| ARN Media Limited |
Perseus Mining and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and ARN Media
The main advantage of trading using opposite Perseus Mining and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Perseus Mining vs. Step One Clothing | Perseus Mining vs. Group 6 Metals | Perseus Mining vs. Beston Global Food | Perseus Mining vs. Actinogen Medical |
| ARN Media vs. Olympio Metals | ARN Media vs. Lykos Metals | ARN Media vs. Bisalloy Steel Group | ARN Media vs. ACDC Metals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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