Correlation Between Perseus Mining and Air Transport

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

Diversification Opportunities for Perseus Mining and Air Transport

-0.74

Correlation Coefficient

Perseus Mining  Air Transport

Pay attention - limited upside

The 3 months correlation between Perseus and Air is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Perseus Mining i.e., Perseus Mining and Air Transport go up and down completely randomly.

Pair Corralation between Perseus Mining and Air Transport

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 3.26 times more return on investment than Air Transport. However, Perseus Mining is 3.26 times more volatile than Air Transport Services. It trades about 0.26 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.25 per unit of risk. If you would invest  153.00  in Perseus Mining Limited on October 22, 2024 and sell it today you would earn a total of  10.00  from holding Perseus Mining Limited or generate 6.54% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Air Transport Services

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.

Air Transport Services

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Transport Services are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Air Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perseus Mining and Air Transport

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

The idea behind Perseus Mining Limited and Air Transport Services 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.