Correlation Between Perseus Mining and 90331HPL1

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and 90331HPL1 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 90331HPL1 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 US BANK NATIONAL, you can compare the effects of market volatilities on Perseus Mining and 90331HPL1 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 90331HPL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and 90331HPL1.

Diversification Opportunities for Perseus Mining and 90331HPL1

0.4

Correlation Coefficient

Perseus Mining  90331HPL1

Very weak diversification

The 3 months correlation between Perseus and 90331HPL1 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and US BANK NATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US BANK NATIONAL 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 90331HPL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US BANK NATIONAL has no effect on the direction of Perseus Mining i.e., Perseus Mining and 90331HPL1 go up and down completely randomly.

Pair Corralation between Perseus Mining and 90331HPL1

Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the 90331HPL1. In addition to that, Perseus Mining is 3.31 times more volatile than US BANK NATIONAL. It trades about -0.06 of its total potential returns per unit of risk. US BANK NATIONAL is currently generating about -0.12 per unit of volatility. If you would invest  9,925  in US BANK NATIONAL on October 1, 2024 and sell it today you would lose (378.00) from holding US BANK NATIONAL or give up 3.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.14%
Values	Daily Returns

Perseus Mining Limited  vs.  US BANK NATIONAL

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.

US BANK NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANK NATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US BANK NATIONAL investors.

Pair Trading with Perseus Mining and 90331HPL1

The main advantage of trading using opposite Perseus Mining and 90331HPL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, 90331HPL1 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 90331HPL1 will offset losses from the drop in 90331HPL1's long position.

The idea behind Perseus Mining Limited and US BANK NATIONAL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.