Correlation Between Perseus Mining and Bluescope Steel
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Bluescope Steel 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 Bluescope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Bluescope Steel, you can compare the effects of market volatilities on Perseus Mining and Bluescope Steel 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 Bluescope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Bluescope Steel.
Diversification Opportunities for Perseus Mining and Bluescope Steel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Perseus and Bluescope is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Bluescope Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluescope Steel 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 Bluescope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluescope Steel has no effect on the direction of Perseus Mining i.e., Perseus Mining and Bluescope Steel go up and down completely randomly.
Pair Corralation between Perseus Mining and Bluescope Steel
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.39 times more return on investment than Bluescope Steel. However, Perseus Mining is 1.39 times more volatile than Bluescope Steel. It trades about 0.05 of its potential returns per unit of risk. Bluescope Steel is currently generating about 0.02 per unit of risk. If you would invest 251.00 in Perseus Mining on August 25, 2024 and sell it today you would earn a total of 17.00 from holding Perseus Mining or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Perseus Mining vs. Bluescope Steel
Performance |
| Timeline |
| Perseus Mining |
| Bluescope Steel |
Perseus Mining and Bluescope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Bluescope Steel
The main advantage of trading using opposite Perseus Mining and Bluescope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Bluescope Steel 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 Bluescope Steel will offset losses from the drop in Bluescope Steel's long position.| Perseus Mining vs. Platinum Asia Investments | Perseus Mining vs. Collins Foods | Perseus Mining vs. Hudson Investment Group | Perseus Mining vs. Alternative Investment Trust |
| Bluescope Steel vs. Northern Star Resources | Bluescope Steel vs. Evolution Mining | Bluescope Steel vs. Sandfire Resources NL | Bluescope Steel 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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