Correlation Between Perseus Mining and Zumiez

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

Diversification Opportunities for Perseus Mining and Zumiez

0.3

Correlation Coefficient

Perseus Mining  Zumiez

Weak diversification

The 3 months correlation between Perseus and Zumiez is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Perseus Mining i.e., Perseus Mining and Zumiez go up and down completely randomly.

Pair Corralation between Perseus Mining and Zumiez

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.02 times more return on investment than Zumiez. However, Perseus Mining is 1.02 times more volatile than Zumiez Inc. It trades about 0.07 of its potential returns per unit of risk. Zumiez Inc is currently generating about 0.03 per unit of risk. If you would invest  109.00  in Perseus Mining Limited on October 2, 2024 and sell it today you would earn a total of  49.00  from holding Perseus Mining Limited or generate 44.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.13%
Values	Daily Returns

Perseus Mining Limited  vs.  Zumiez Inc

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.

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Zumiez is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Perseus Mining and Zumiez

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

The idea behind Perseus Mining Limited and Zumiez Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.