Correlation Between Perseus Mining and Red Hill
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Red Hill 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 Red Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Red Hill Iron, you can compare the effects of market volatilities on Perseus Mining and Red Hill 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 Red Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Red Hill.
Diversification Opportunities for Perseus Mining and Red Hill
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and Red is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Red Hill Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Hill Iron 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 Red Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Hill Iron has no effect on the direction of Perseus Mining i.e., Perseus Mining and Red Hill go up and down completely randomly.
Pair Corralation between Perseus Mining and Red Hill
Assuming the 90 days trading horizon Perseus Mining is expected to under-perform the Red Hill. In addition to that, Perseus Mining is 1.03 times more volatile than Red Hill Iron. It trades about -0.24 of its total potential returns per unit of risk. Red Hill Iron is currently generating about -0.07 per unit of volatility. If you would invest 412.00 in Red Hill Iron on October 11, 2024 and sell it today you would lose (7.00) from holding Red Hill Iron or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Red Hill Iron
Performance |
| Timeline |
| Perseus Mining |
| Red Hill Iron |
Perseus Mining and Red Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Red Hill
The main advantage of trading using opposite Perseus Mining and Red Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Red Hill 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 Red Hill will offset losses from the drop in Red Hill's long position.| Perseus Mining vs. Dexus Convenience Retail | Perseus Mining vs. Advanced Braking Technology | Perseus Mining vs. Kip McGrath Education | Perseus Mining vs. Bio Gene Technology |
| Red Hill vs. Stelar Metals | Red Hill vs. Hammer Metals | Red Hill vs. Iron Road | Red Hill vs. Readytech Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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