Correlation Between Perseus Mining and Ballistic Recovery

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

Diversification Opportunities for Perseus Mining and Ballistic Recovery

0.01

Correlation Coefficient

Perseus Mining  Ballistic Recovery

Significant diversification

The 3 months correlation between Perseus and Ballistic is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Ballistic Recovery Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballistic Recovery 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 Ballistic Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballistic Recovery has no effect on the direction of Perseus Mining i.e., Perseus Mining and Ballistic Recovery go up and down completely randomly.

Pair Corralation between Perseus Mining and Ballistic Recovery

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.38 times more return on investment than Ballistic Recovery. However, Perseus Mining Limited is 2.65 times less risky than Ballistic Recovery. It trades about 0.03 of its potential returns per unit of risk. Ballistic Recovery Systems is currently generating about -0.13 per unit of risk. If you would invest  169.00  in Perseus Mining Limited on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Perseus Mining Limited or generate 2.96% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Ballistic Recovery Systems

Perseus Mining

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 2 (%) 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.

Ballistic Recovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ballistic Recovery Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Perseus Mining and Ballistic Recovery

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

The idea behind Perseus Mining Limited and Ballistic Recovery Systems 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .