Correlation Between JBDI Holdings and Perseus Mining

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

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

Diversification Opportunities for JBDI Holdings and Perseus Mining

0.67

Correlation Coefficient

JBDI Holdings  Perseus Mining

Poor diversification

The 3 months correlation between JBDI and Perseus is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding JBDI Holdings Limited and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and JBDI Holdings 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 JBDI Holdings Limited 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 JBDI Holdings i.e., JBDI Holdings and Perseus Mining go up and down completely randomly.

Pair Corralation between JBDI Holdings and Perseus Mining

Given the investment horizon of 90 days JBDI Holdings Limited is expected to under-perform the Perseus Mining. In addition to that, JBDI Holdings is 2.38 times more volatile than Perseus Mining Limited. It trades about -0.09 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.05 per unit of volatility. If you would invest  175.00  in Perseus Mining Limited on September 29, 2024 and sell it today you would lose (18.00) from holding Perseus Mining Limited or give up 10.29% of portfolio value over 90 days.

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

JBDI Holdings Limited  vs.  Perseus Mining Limited

JBDI Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JBDI Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Perseus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perseus Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with JBDI Holdings and Perseus Mining

The main advantage of trading using opposite JBDI Holdings and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBDI Holdings 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 JBDI Holdings Limited 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 Transaction History module to view history of all your transactions and understand their impact on performance.