Correlation Between Perseus Mining and Marvel Gold
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Marvel Gold 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 Marvel Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Marvel Gold, you can compare the effects of market volatilities on Perseus Mining and Marvel Gold 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 Marvel Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Marvel Gold.
Diversification Opportunities for Perseus Mining and Marvel Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perseus and Marvel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Marvel Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvel Gold 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 Marvel Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvel Gold has no effect on the direction of Perseus Mining i.e., Perseus Mining and Marvel Gold go up and down completely randomly.
Pair Corralation between Perseus Mining and Marvel Gold
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.84 times less return on investment than Marvel Gold. But when comparing it to its historical volatility, Perseus Mining is 3.63 times less risky than Marvel Gold. It trades about 0.06 of its potential returns per unit of risk. Marvel Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Marvel Gold on September 3, 2024 and sell it today you would lose (0.10) from holding Marvel Gold or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Marvel Gold
Performance |
| Timeline |
| Perseus Mining |
| Marvel Gold |
Perseus Mining and Marvel Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Marvel Gold
The main advantage of trading using opposite Perseus Mining and Marvel Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Marvel Gold 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 Marvel Gold will offset losses from the drop in Marvel Gold's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Aneka Tambang Tbk |
| Marvel Gold vs. Autosports Group | Marvel Gold vs. BTC Health Limited | Marvel Gold vs. Austco Healthcare | Marvel Gold vs. Carnegie Clean Energy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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