Correlation Between Perseus Mining and Australian United
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Australian United 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 Australian United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Australian United Investment, you can compare the effects of market volatilities on Perseus Mining and Australian United 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 Australian United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Australian United.
Diversification Opportunities for Perseus Mining and Australian United
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Australian is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Australian United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian United 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 Australian United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian United has no effect on the direction of Perseus Mining i.e., Perseus Mining and Australian United go up and down completely randomly.
Pair Corralation between Perseus Mining and Australian United
Assuming the 90 days trading horizon Perseus Mining is expected to generate 3.4 times more return on investment than Australian United. However, Perseus Mining is 3.4 times more volatile than Australian United Investment. It trades about 0.03 of its potential returns per unit of risk. Australian United Investment is currently generating about 0.05 per unit of risk. If you would invest 207.00 in Perseus Mining on September 3, 2024 and sell it today you would earn a total of 57.00 from holding Perseus Mining or generate 27.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Australian United Investment
Performance |
| Timeline |
| Perseus Mining |
| Australian United |
Perseus Mining and Australian United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Australian United
The main advantage of trading using opposite Perseus Mining and Australian United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Australian United 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 Australian United will offset losses from the drop in Australian United's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Aneka Tambang Tbk |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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