Correlation Between SMA Solar and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both SMA Solar 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 SMA Solar and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Perseus Mining Limited, you can compare the effects of market volatilities on SMA Solar 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 SMA Solar with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Perseus Mining.
Diversification Opportunities for SMA Solar and Perseus Mining
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMA and Perseus is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and SMA Solar 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 SMA Solar Technology 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 SMA Solar i.e., SMA Solar and Perseus Mining go up and down completely randomly.
Pair Corralation between SMA Solar and Perseus Mining
Assuming the 90 days horizon SMA Solar Technology is expected to under-perform the Perseus Mining. In addition to that, SMA Solar is 2.34 times more volatile than Perseus Mining Limited. It trades about -0.09 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.08 per unit of volatility. If you would invest 168.00 in Perseus Mining Limited on September 3, 2024 and sell it today you would lose (7.00) from holding Perseus Mining Limited or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Perseus Mining Limited
Performance |
| Timeline |
| SMA Solar Technology |
| Perseus Mining |
SMA Solar and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Perseus Mining
The main advantage of trading using opposite SMA Solar and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar 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.| SMA Solar vs. Superior Plus Corp | SMA Solar vs. NMI Holdings | SMA Solar vs. Origin Agritech | SMA Solar vs. SIVERS SEMICONDUCTORS AB |
| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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