Correlation Between Perseus Mining and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Sandfire Resources 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 Sandfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Sandfire Resources NL, you can compare the effects of market volatilities on Perseus Mining and Sandfire Resources 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 Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Sandfire Resources.
Diversification Opportunities for Perseus Mining and Sandfire Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perseus and Sandfire is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Sandfire Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Perseus Mining i.e., Perseus Mining and Sandfire Resources go up and down completely randomly.
Pair Corralation between Perseus Mining and Sandfire Resources
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.11 times less return on investment than Sandfire Resources. In addition to that, Perseus Mining is 1.11 times more volatile than Sandfire Resources NL. It trades about 0.08 of its total potential returns per unit of risk. Sandfire Resources NL is currently generating about 0.1 per unit of volatility. If you would invest 606.00 in Sandfire Resources NL on August 25, 2024 and sell it today you would earn a total of 421.00 from holding Sandfire Resources NL or generate 69.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Sandfire Resources NL
Performance |
| Timeline |
| Perseus Mining |
| Sandfire Resources |
Perseus Mining and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Sandfire Resources
The main advantage of trading using opposite Perseus Mining and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Sandfire Resources 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' long position.| Perseus Mining vs. Platinum Asia Investments | Perseus Mining vs. Collins Foods | Perseus Mining vs. Hudson Investment Group | Perseus Mining vs. Alternative Investment Trust |
| Sandfire Resources vs. Hudson Investment Group | Sandfire Resources vs. Argo Investments | Sandfire Resources vs. Regal Investment | Sandfire Resources vs. Spirit Telecom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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