Correlation Between Perseus Mining and Apartment Investment

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

Diversification Opportunities for Perseus Mining and Apartment Investment

0.03

Correlation Coefficient

Perseus Mining  Apartment Investment

Significant diversification

The 3 months correlation between Perseus and Apartment is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and 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 Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Perseus Mining i.e., Perseus Mining and Apartment Investment go up and down completely randomly.

Pair Corralation between Perseus Mining and Apartment Investment

Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Apartment Investment. But the pink sheet apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 1.01 times less risky than Apartment Investment. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Apartment Investment and is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  873.00  in Apartment Investment and on October 11, 2024 and sell it today you would lose (12.00) from holding Apartment Investment and or give up 1.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Perseus Mining Limited  vs.  Apartment Investment and

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.

Apartment Investment and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apartment Investment and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Apartment Investment is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Perseus Mining and Apartment Investment

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

The idea behind Perseus Mining Limited and Apartment Investment and 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.