Correlation Between Perseus Mining and Kingsgate Consolidated
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Kingsgate Consolidated 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 Kingsgate Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Kingsgate Consolidated, you can compare the effects of market volatilities on Perseus Mining and Kingsgate Consolidated 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 Kingsgate Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Kingsgate Consolidated.
Diversification Opportunities for Perseus Mining and Kingsgate Consolidated
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Perseus and Kingsgate is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Kingsgate Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsgate Consolidated 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 Kingsgate Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsgate Consolidated has no effect on the direction of Perseus Mining i.e., Perseus Mining and Kingsgate Consolidated go up and down completely randomly.
Pair Corralation between Perseus Mining and Kingsgate Consolidated
Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.51 times more return on investment than Kingsgate Consolidated. However, Perseus Mining is 1.96 times less risky than Kingsgate Consolidated. It trades about -0.18 of its potential returns per unit of risk. Kingsgate Consolidated is currently generating about -0.14 per unit of risk. If you would invest 287.00 in Perseus Mining on August 31, 2024 and sell it today you would lose (25.00) from holding Perseus Mining or give up 8.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Perseus Mining vs. Kingsgate Consolidated
Performance |
| Timeline |
| Perseus Mining |
| Kingsgate Consolidated |
Perseus Mining and Kingsgate Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Kingsgate Consolidated
The main advantage of trading using opposite Perseus Mining and Kingsgate Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Kingsgate Consolidated 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 Kingsgate Consolidated will offset losses from the drop in Kingsgate Consolidated's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. De Grey Mining |
| Kingsgate Consolidated vs. Northern Star Resources | Kingsgate Consolidated vs. Evolution Mining | Kingsgate Consolidated vs. Bluescope Steel | Kingsgate Consolidated vs. De Grey Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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