Correlation Between Perseus Mining and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and GoGold 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 GoGold 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 GoGold Resources, you can compare the effects of market volatilities on Perseus Mining and GoGold 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 GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and GoGold Resources.
Diversification Opportunities for Perseus Mining and GoGold Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perseus and GoGold is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold 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 GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of Perseus Mining i.e., Perseus Mining and GoGold Resources go up and down completely randomly.
Pair Corralation between Perseus Mining and GoGold Resources
Assuming the 90 days trading horizon Perseus Mining is expected to generate 11.93 times more return on investment than GoGold Resources. However, Perseus Mining is 11.93 times more volatile than GoGold Resources. It trades about 0.22 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.3 per unit of risk. If you would invest 102.00 in Perseus Mining on September 18, 2024 and sell it today you would earn a total of 141.00 from holding Perseus Mining or generate 138.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Perseus Mining vs. GoGold Resources
Performance |
| Timeline |
| Perseus Mining |
| GoGold Resources |
Perseus Mining and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and GoGold Resources
The main advantage of trading using opposite Perseus Mining and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, GoGold 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| Perseus Mining vs. Arizona Sonoran Copper | Perseus Mining vs. World Copper | Perseus Mining vs. QC Copper and |
| GoGold Resources vs. Outcrop Gold Corp | GoGold Resources vs. Strikepoint Gold | GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Eskay Mining Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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