Correlation Between Perseus Mining and Equinix

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

Diversification Opportunities for Perseus Mining and Equinix

-0.5

Correlation Coefficient

Perseus Mining  Equinix

Very good diversification

The 3 months correlation between Perseus and Equinix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Perseus Mining i.e., Perseus Mining and Equinix go up and down completely randomly.

Pair Corralation between Perseus Mining and Equinix

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.13 times more return on investment than Equinix. However, Perseus Mining is 1.13 times more volatile than Equinix. It trades about 0.16 of its potential returns per unit of risk. Equinix is currently generating about -0.11 per unit of risk. If you would invest  152.00  in Perseus Mining Limited on December 23, 2024 and sell it today you would earn a total of  31.00  from holding Perseus Mining Limited or generate 20.39% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Equinix

Perseus Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Equinix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equinix 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Perseus Mining and Equinix

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

The idea behind Perseus Mining Limited and Equinix 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.