Correlation Between Perseus Mining and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Collins Foods 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 Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Collins Foods, you can compare the effects of market volatilities on Perseus Mining and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Collins Foods.
Diversification Opportunities for Perseus Mining and Collins Foods
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perseus and Collins is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Perseus Mining i.e., Perseus Mining and Collins Foods go up and down completely randomly.
Pair Corralation between Perseus Mining and Collins Foods
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.26 times more return on investment than Collins Foods. However, Perseus Mining is 1.26 times more volatile than Collins Foods. It trades about 0.08 of its potential returns per unit of risk. Collins Foods is currently generating about -0.05 per unit of risk. If you would invest 237.00 in Perseus Mining on November 7, 2024 and sell it today you would earn a total of 47.00 from holding Perseus Mining or generate 19.83% 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. Collins Foods
Performance |
| Timeline |
| Perseus Mining |
| Collins Foods |
Perseus Mining and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Collins Foods
The main advantage of trading using opposite Perseus Mining and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Perseus Mining vs. Retail Food Group | Perseus Mining vs. Aristocrat Leisure | Perseus Mining vs. Ramsay Health Care | Perseus Mining vs. Regis Healthcare |
| Collins Foods vs. Regal Funds Management | Collins Foods vs. Microequities Asset Management | Collins Foods vs. Ras Technology Holdings | Collins Foods vs. Super Retail Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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