Correlation Between Perseus Mining and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Perseus Mining and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Advanced Micro.

Diversification Opportunities for Perseus Mining and Advanced Micro

0.38

Correlation Coefficient

Perseus Mining  Advanced Micro

Weak diversification

The 3 months correlation between Perseus and Advanced is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Perseus Mining i.e., Perseus Mining and Advanced Micro go up and down completely randomly.

Pair Corralation between Perseus Mining and Advanced Micro

Assuming the 90 days horizon Perseus Mining is expected to generate 1.1 times less return on investment than Advanced Micro. In addition to that, Perseus Mining is 1.01 times more volatile than Advanced Micro Devices. It trades about 0.04 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.04 per unit of volatility. If you would invest  8,122  in Advanced Micro Devices on October 25, 2024 and sell it today you would earn a total of  3,722  from holding Advanced Micro Devices or generate 45.83% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Advanced Micro Devices

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 weak 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.

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Perseus Mining and Advanced Micro

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

The idea behind Perseus Mining Limited and Advanced Micro Devices 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.