Correlation Between Centuria Industrial and Perseus Mining

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

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

Diversification Opportunities for Centuria Industrial and Perseus Mining

0.0

Correlation Coefficient

Centuria Industrial  Perseus Mining

Pay attention - limited upside

The 3 months correlation between Centuria and Perseus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Centuria Industrial 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 Centuria Industrial Reit 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 Centuria Industrial i.e., Centuria Industrial and Perseus Mining go up and down completely randomly.

Pair Corralation between Centuria Industrial and Perseus Mining

Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 2.52 times less risky than Perseus Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Perseus Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  179.00  in Perseus Mining on September 4, 2024 and sell it today you would earn a total of  80.00  from holding Perseus Mining or generate 44.69% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Perseus Mining

Centuria Industrial Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centuria Industrial Reit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Centuria Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Perseus Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively 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 Centuria Industrial and Perseus Mining

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

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.