Correlation Between Perseus Mining and Academy Sports

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

Diversification Opportunities for Perseus Mining and Academy Sports

0.21

Correlation Coefficient

Perseus Mining  Academy Sports

Modest diversification

The 3 months correlation between Perseus and Academy is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Perseus Mining i.e., Perseus Mining and Academy Sports go up and down completely randomly.

Pair Corralation between Perseus Mining and Academy Sports

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.31 times more return on investment than Academy Sports. However, Perseus Mining is 1.31 times more volatile than Academy Sports Outdoors. It trades about 0.02 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.05 per unit of risk. If you would invest  173.00  in Perseus Mining Limited on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Perseus Mining Limited or generate 0.58% 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.  Academy Sports Outdoors

Perseus Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Academy Sports Outdoors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Academy Sports Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Perseus Mining and Academy Sports

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

The idea behind Perseus Mining Limited and Academy Sports Outdoors 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.