Correlation Between Coeur Mining and Perseus Mining

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

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

Diversification Opportunities for Coeur Mining and Perseus Mining

0.09

Correlation Coefficient

Coeur Mining  Perseus Mining

Significant diversification

The 3 months correlation between Coeur and Perseus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Coeur Mining 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 Coeur Mining 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 Coeur Mining i.e., Coeur Mining and Perseus Mining go up and down completely randomly.

Pair Corralation between Coeur Mining and Perseus Mining

Assuming the 90 days horizon Coeur Mining is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, Coeur Mining is 2.08 times less risky than Perseus Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Perseus Mining Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Perseus Mining Limited on September 1, 2024 and sell it today you would earn a total of  23.00  from holding Perseus Mining Limited or generate 16.67% return on investment over 90 days.

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

Coeur Mining  vs.  Perseus Mining Limited

Coeur Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Coeur Mining 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

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 4 (%) 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 December 2024.

Pair Trading with Coeur Mining and Perseus Mining

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