Correlation Between Grupo Carso and Perseus Mining

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

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

Diversification Opportunities for Grupo Carso and Perseus Mining

0.24

Correlation Coefficient

Grupo Carso  Perseus Mining

Modest diversification

The 3 months correlation between Grupo and Perseus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Grupo Carso 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 Grupo Carso SAB 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 Grupo Carso i.e., Grupo Carso and Perseus Mining go up and down completely randomly.

Pair Corralation between Grupo Carso and Perseus Mining

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Perseus Mining. In addition to that, Grupo Carso is 1.26 times more volatile than Perseus Mining Limited. It trades about -0.02 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  106.00  in Perseus Mining Limited on September 13, 2024 and sell it today you would earn a total of  63.00  from holding Perseus Mining Limited or generate 59.43% return on investment over 90 days.

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

Grupo Carso SAB  vs.  Perseus Mining Limited

Grupo Carso SAB

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Carso SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Perseus Mining

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grupo Carso and Perseus Mining

The main advantage of trading using opposite Grupo Carso and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso 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 Grupo Carso SAB 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.