Correlation Between Perseus Mining and Emetals
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Emetals 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 Emetals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Emetals, you can compare the effects of market volatilities on Perseus Mining and Emetals 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 Emetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Emetals.
Diversification Opportunities for Perseus Mining and Emetals
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Emetals is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Emetals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emetals 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 Emetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emetals has no effect on the direction of Perseus Mining i.e., Perseus Mining and Emetals go up and down completely randomly.
Pair Corralation between Perseus Mining and Emetals
Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.28 times more return on investment than Emetals. However, Perseus Mining is 3.54 times less risky than Emetals. It trades about 0.14 of its potential returns per unit of risk. Emetals is currently generating about -0.13 per unit of risk. If you would invest 287.00 in Perseus Mining on December 10, 2024 and sell it today you would earn a total of 19.00 from holding Perseus Mining or generate 6.62% 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. Emetals
Performance |
| Timeline |
| Perseus Mining |
| Emetals |
Perseus Mining and Emetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Emetals
The main advantage of trading using opposite Perseus Mining and Emetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Emetals 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 Emetals will offset losses from the drop in Emetals' long position.| Perseus Mining vs. Centaurus Metals | Perseus Mining vs. Hotel Property Investments | Perseus Mining vs. Beston Global Food | Perseus Mining vs. Regis Healthcare |
| Emetals vs. Northern Star Resources | Emetals vs. Alcoa Inc | Emetals vs. Evolution Mining | Emetals vs. Bluescope Steel |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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