Correlation Between Perseus Mining and Future Generation
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Future Generation 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 Future Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Future Generation Global, you can compare the effects of market volatilities on Perseus Mining and Future Generation 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 Future Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Future Generation.
Diversification Opportunities for Perseus Mining and Future Generation
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perseus and Future is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Future Generation Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Generation Global 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 Future Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Generation Global has no effect on the direction of Perseus Mining i.e., Perseus Mining and Future Generation go up and down completely randomly.
Pair Corralation between Perseus Mining and Future Generation
Assuming the 90 days trading horizon Perseus Mining is expected to under-perform the Future Generation. In addition to that, Perseus Mining is 3.34 times more volatile than Future Generation Global. It trades about -0.13 of its total potential returns per unit of risk. Future Generation Global is currently generating about 0.21 per unit of volatility. If you would invest 135.00 in Future Generation Global on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Future Generation Global or generate 2.96% 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. Future Generation Global
Performance |
| Timeline |
| Perseus Mining |
| Future Generation Global |
Perseus Mining and Future Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Future Generation
The main advantage of trading using opposite Perseus Mining and Future Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Future Generation 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 Future Generation will offset losses from the drop in Future Generation's long position.| Perseus Mining vs. Healthco Healthcare and | Perseus Mining vs. Insignia Financial | Perseus Mining vs. Singular Health Group | Perseus Mining vs. Qbe Insurance Group |
| Future Generation vs. Aurelia Metals | Future Generation vs. Mount Gibson Iron | Future Generation vs. Perseus Mining | Future Generation vs. Retail Food 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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