Correlation Between Perseus Mining and Cadeler AS

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

Diversification Opportunities for Perseus Mining and Cadeler AS

0.66

Correlation Coefficient

Perseus Mining  Cadeler AS

Poor diversification

The 3 months correlation between Perseus and Cadeler is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of Perseus Mining i.e., Perseus Mining and Cadeler AS go up and down completely randomly.

Pair Corralation between Perseus Mining and Cadeler AS

Assuming the 90 days horizon Perseus Mining is expected to generate 1.7 times less return on investment than Cadeler AS. In addition to that, Perseus Mining is 1.53 times more volatile than Cadeler AS. It trades about 0.02 of its total potential returns per unit of risk. Cadeler AS is currently generating about 0.05 per unit of volatility. If you would invest  1,820  in Cadeler AS on October 11, 2024 and sell it today you would earn a total of  426.00  from holding Cadeler AS or generate 23.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	54.15%
Values	Daily Returns

Perseus Mining Limited  vs.  Cadeler AS

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.

Cadeler AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Perseus Mining and Cadeler AS

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

The idea behind Perseus Mining Limited and Cadeler AS 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.