Correlation Between Perseus Mining and Aurum Resources
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Aurum Resources 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 Aurum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Aurum Resources, you can compare the effects of market volatilities on Perseus Mining and Aurum Resources 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 Aurum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Aurum Resources.
Diversification Opportunities for Perseus Mining and Aurum Resources
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perseus and Aurum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Aurum Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurum Resources 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 Aurum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurum Resources has no effect on the direction of Perseus Mining i.e., Perseus Mining and Aurum Resources go up and down completely randomly.
Pair Corralation between Perseus Mining and Aurum Resources
Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.55 times more return on investment than Aurum Resources. However, Perseus Mining is 1.83 times less risky than Aurum Resources. It trades about 0.06 of its potential returns per unit of risk. Aurum Resources is currently generating about 0.02 per unit of risk. If you would invest 231.00 in Perseus Mining on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Perseus Mining or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Aurum Resources
Performance |
| Timeline |
| Perseus Mining |
| Aurum Resources |
Perseus Mining and Aurum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Aurum Resources
The main advantage of trading using opposite Perseus Mining and Aurum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Aurum Resources 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 Aurum Resources will offset losses from the drop in Aurum Resources' long position.| Perseus Mining vs. Navigator Global Investments | Perseus Mining vs. Ramsay Health Care | Perseus Mining vs. Alternative Investment Trust | Perseus Mining vs. Health and Plant |
| Aurum Resources vs. Apiam Animal Health | Aurum Resources vs. Oceania Healthcare | Aurum Resources vs. AiMedia Technologies | Aurum Resources vs. Hutchison Telecommunications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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