Correlation Between Perseus Mining and 191216CR9

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and 191216CR9 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 191216CR9 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 COCA COLA CO, you can compare the effects of market volatilities on Perseus Mining and 191216CR9 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 191216CR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and 191216CR9.

Diversification Opportunities for Perseus Mining and 191216CR9

-0.13

Correlation Coefficient

Perseus Mining  191216CR9

Good diversification

The 3 months correlation between Perseus and 191216CR9 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Perseus Mining i.e., Perseus Mining and 191216CR9 go up and down completely randomly.

Pair Corralation between Perseus Mining and 191216CR9

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 14.09 times more return on investment than 191216CR9. However, Perseus Mining is 14.09 times more volatile than COCA COLA CO. It trades about 0.19 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.07 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  42.00  from holding Perseus Mining Limited or generate 26.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Perseus Mining Limited  vs.  COCA COLA CO

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.

COCA A CO

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COCA COLA CO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 191216CR9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Perseus Mining and 191216CR9

The main advantage of trading using opposite Perseus Mining and 191216CR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, 191216CR9 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 191216CR9 will offset losses from the drop in 191216CR9's long position.

The idea behind Perseus Mining Limited and COCA COLA CO 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.