Correlation Between Perseus Mining and Sable Offshore

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

Diversification Opportunities for Perseus Mining and Sable Offshore

0.25

Correlation Coefficient

Perseus Mining  Sable Offshore

Modest diversification

The 3 months correlation between Perseus and Sable is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Perseus Mining i.e., Perseus Mining and Sable Offshore go up and down completely randomly.

Pair Corralation between Perseus Mining and Sable Offshore

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.46 times more return on investment than Sable Offshore. However, Perseus Mining Limited is 2.19 times less risky than Sable Offshore. It trades about 0.2 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.06 per unit of risk. If you would invest  157.00  in Perseus Mining Limited on December 25, 2024 and sell it today you would earn a total of  46.00  from holding Perseus Mining Limited or generate 29.3% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Sable Offshore Corp

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 15 (%) 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.

Sable Offshore Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perseus Mining and Sable Offshore

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

The idea behind Perseus Mining Limited and Sable Offshore Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.