Correlation Between Perseus Mining and Summerset Group
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Summerset Group 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 Summerset Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Summerset Group Holdings, you can compare the effects of market volatilities on Perseus Mining and Summerset Group 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 Summerset Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Summerset Group.
Diversification Opportunities for Perseus Mining and Summerset Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perseus and Summerset is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Summerset Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summerset Group Holdings 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 Summerset Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summerset Group Holdings has no effect on the direction of Perseus Mining i.e., Perseus Mining and Summerset Group go up and down completely randomly.
Pair Corralation between Perseus Mining and Summerset Group
Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.37 times less return on investment than Summerset Group. In addition to that, Perseus Mining is 1.09 times more volatile than Summerset Group Holdings. It trades about 0.03 of its total potential returns per unit of risk. Summerset Group Holdings is currently generating about 0.04 per unit of volatility. If you would invest 841.00 in Summerset Group Holdings on September 4, 2024 and sell it today you would earn a total of 335.00 from holding Summerset Group Holdings or generate 39.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining vs. Summerset Group Holdings
Performance |
| Timeline |
| Perseus Mining |
| Summerset Group Holdings |
Perseus Mining and Summerset Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Summerset Group
The main advantage of trading using opposite Perseus Mining and Summerset Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Summerset Group 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 Summerset Group will offset losses from the drop in Summerset Group's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Sandfire Resources NL |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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