Correlation Between Perseus Mining and Aspen Group
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Aspen Group 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 Aspen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Aspen Group Unit, you can compare the effects of market volatilities on Perseus Mining and Aspen Group 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 Aspen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Aspen Group.
Diversification Opportunities for Perseus Mining and Aspen Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and Aspen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Aspen Group Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Group Unit 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 Aspen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Group Unit has no effect on the direction of Perseus Mining i.e., Perseus Mining and Aspen Group go up and down completely randomly.
Pair Corralation between Perseus Mining and Aspen Group
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.34 times more return on investment than Aspen Group. However, Perseus Mining is 1.34 times more volatile than Aspen Group Unit. It trades about 0.07 of its potential returns per unit of risk. Aspen Group Unit is currently generating about 0.07 per unit of risk. If you would invest 174.00 in Perseus Mining on September 12, 2024 and sell it today you would earn a total of 103.00 from holding Perseus Mining or generate 59.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Aspen Group Unit
Performance |
| Timeline |
| Perseus Mining |
| Aspen Group Unit |
Perseus Mining and Aspen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Aspen Group
The main advantage of trading using opposite Perseus Mining and Aspen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Aspen Group 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 Aspen Group will offset losses from the drop in Aspen Group's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Sandfire Resources NL |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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