Correlation Between Perseus Mining and REGAL ASIAN

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

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

Diversification Opportunities for Perseus Mining and REGAL ASIAN

0.56

Correlation Coefficient

Perseus Mining  REGAL ASIAN

Very weak diversification

The 3 months correlation between Perseus and REGAL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and Perseus 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 Perseus Mining Limited are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Perseus Mining i.e., Perseus Mining and REGAL ASIAN go up and down completely randomly.

Pair Corralation between Perseus Mining and REGAL ASIAN

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.45 times more return on investment than REGAL ASIAN. However, Perseus Mining is 1.45 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.07 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.05 per unit of risk. If you would invest  148.00  in Perseus Mining Limited on August 31, 2024 and sell it today you would earn a total of  15.00  from holding Perseus Mining Limited or generate 10.14% return on investment over 90 days.

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

Perseus Mining Limited  vs.  REGAL ASIAN INVESTMENTS

Perseus Mining

Risk-Adjusted Performance

5 of 100

Modest

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 fragile basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, REGAL ASIAN is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Perseus Mining and REGAL ASIAN

The main advantage of trading using opposite Perseus Mining and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.

The idea behind Perseus Mining Limited and REGAL ASIAN INVESTMENTS 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.