Correlation Between BW OFFSHORE and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE 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 BW OFFSHORE and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW OFFSHORE LTD and Perseus Mining Limited, you can compare the effects of market volatilities on BW OFFSHORE 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 BW OFFSHORE with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and Perseus Mining.
Diversification Opportunities for BW OFFSHORE and Perseus Mining
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between XY81 and Perseus is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and BW OFFSHORE 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 BW OFFSHORE LTD 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 BW OFFSHORE i.e., BW OFFSHORE and Perseus Mining go up and down completely randomly.
Pair Corralation between BW OFFSHORE and Perseus Mining
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.16 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.17 times less risky than Perseus Mining. It trades about 0.04 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 122.00 in Perseus Mining Limited on October 27, 2024 and sell it today you would earn a total of 46.00 from holding Perseus Mining Limited or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. Perseus Mining Limited
Performance |
| Timeline |
| BW OFFSHORE LTD |
| Perseus Mining |
BW OFFSHORE and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and Perseus Mining
The main advantage of trading using opposite BW OFFSHORE and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE 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.| BW OFFSHORE vs. Monster Beverage Corp | BW OFFSHORE vs. Corporate Office Properties | BW OFFSHORE vs. Rayonier Advanced Materials | BW OFFSHORE vs. CENTURIA OFFICE REIT |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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