Correlation Between Perseus Mining and VOXX International

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

Diversification Opportunities for Perseus Mining and VOXX International

0.24

Correlation Coefficient

Perseus Mining  VOXX International

Modest diversification

The 3 months correlation between Perseus and VOXX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and VOXX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOXX International 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 VOXX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOXX International has no effect on the direction of Perseus Mining i.e., Perseus Mining and VOXX International go up and down completely randomly.

Pair Corralation between Perseus Mining and VOXX International

Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the VOXX International. But the stock apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 1.65 times less risky than VOXX International. The stock trades about -0.01 of its potential returns per unit of risk. The VOXX International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  700.00  in VOXX International on October 26, 2024 and sell it today you would earn a total of  0.00  from holding VOXX International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Perseus Mining Limited  vs.  VOXX International

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 nearly stable basic indicators, Perseus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VOXX International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VOXX International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VOXX International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Perseus Mining and VOXX International

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

The idea behind Perseus Mining Limited and VOXX International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.