Correlation Between Perseus Mining and SL Green

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

Diversification Opportunities for Perseus Mining and SL Green

-0.72

Correlation Coefficient

Perseus Mining  SL Green

Pay attention - limited upside

The 3 months correlation between Perseus and SLG is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Perseus Mining i.e., Perseus Mining and SL Green go up and down completely randomly.

Pair Corralation between Perseus Mining and SL Green

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.14 times more return on investment than SL Green. However, Perseus Mining is 1.14 times more volatile than SL Green Realty. It trades about 0.19 of its potential returns per unit of risk. SL Green Realty is currently generating about -0.07 per unit of risk. If you would invest  157.00  in Perseus Mining Limited on December 27, 2024 and sell it today you would earn a total of  43.00  from holding Perseus Mining Limited or generate 27.39% return on investment over 90 days.

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

Perseus Mining Limited  vs.  SL Green Realty

Perseus Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.

SL Green Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Perseus Mining and SL Green

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

The idea behind Perseus Mining Limited and SL Green Realty 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.