Correlation Between RMG Acquisition and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both RMG Acquisition and Perseus Mining 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 RMG Acquisition and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMG Acquisition Corp and Perseus Mining Limited, you can compare the effects of market volatilities on RMG Acquisition and Perseus Mining 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 RMG Acquisition with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Perseus Mining.
Diversification Opportunities for RMG Acquisition and Perseus Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RMG and Perseus is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding RMG Acquisition Corp and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and RMG Acquisition 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 RMG Acquisition Corp are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of RMG Acquisition i.e., RMG Acquisition and Perseus Mining go up and down completely randomly.
Pair Corralation between RMG Acquisition and Perseus Mining
Assuming the 90 days horizon RMG Acquisition Corp is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, RMG Acquisition Corp is 2.43 times less risky than Perseus Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Perseus Mining Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Perseus Mining Limited on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Perseus Mining Limited or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.44% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Perseus Mining Limited
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Perseus Mining |
RMG Acquisition and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Perseus Mining
The main advantage of trading using opposite RMG Acquisition and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG Acquisition position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| RMG Acquisition vs. Perseus Mining Limited | RMG Acquisition vs. Celsius Holdings | RMG Acquisition vs. Vita Coco | RMG Acquisition vs. Diageo PLC ADR |
| Perseus Mining vs. Revival Gold | Perseus Mining vs. Galiano Gold | Perseus Mining vs. US Gold Corp | Perseus Mining vs. HUMANA INC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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