Correlation Between Perseus Mining and Orchestra BioMed

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

Diversification Opportunities for Perseus Mining and Orchestra BioMed

0.43

Correlation Coefficient

Perseus Mining  Orchestra BioMed

Very weak diversification

The 3 months correlation between Perseus and Orchestra is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Orchestra BioMed Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orchestra BioMed Holdings 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 Orchestra BioMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orchestra BioMed Holdings has no effect on the direction of Perseus Mining i.e., Perseus Mining and Orchestra BioMed go up and down completely randomly.

Pair Corralation between Perseus Mining and Orchestra BioMed

Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the Orchestra BioMed. But the pink sheet apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 2.22 times less risky than Orchestra BioMed. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Orchestra BioMed Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  566.00  in Orchestra BioMed Holdings on October 25, 2024 and sell it today you would lose (14.00) from holding Orchestra BioMed Holdings or give up 2.47% of portfolio value over 90 days.

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

Perseus Mining Limited  vs.  Orchestra BioMed Holdings

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 fragile 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.

Orchestra BioMed Holdings

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orchestra BioMed Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Orchestra BioMed may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Perseus Mining and Orchestra BioMed

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

The idea behind Perseus Mining Limited and Orchestra BioMed Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.