Correlation Between Materialise and Perseus Mining

Can any of the company-specific risk be diversified away by investing in both Materialise 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 Materialise and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Materialise NV and Perseus Mining Limited, you can compare the effects of market volatilities on Materialise 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 Materialise with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Perseus Mining.

Diversification Opportunities for Materialise and Perseus Mining

-0.51

Correlation Coefficient

Materialise  Perseus Mining

Excellent diversification

The 3 months correlation between Materialise and Perseus is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Materialise 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 Materialise NV 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 Materialise i.e., Materialise and Perseus Mining go up and down completely randomly.

Pair Corralation between Materialise and Perseus Mining

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the Perseus Mining. In addition to that, Materialise is 2.68 times more volatile than Perseus Mining Limited. It trades about -0.08 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.16 per unit of volatility. If you would invest  151.00  in Perseus Mining Limited on December 25, 2024 and sell it today you would earn a total of  32.00  from holding Perseus Mining Limited or generate 21.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Materialise NV  vs.  Perseus Mining Limited

Materialise NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Materialise NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Perseus Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Materialise and Perseus Mining

The main advantage of trading using opposite Materialise and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise 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.

The idea behind Materialise NV and Perseus Mining Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.