Correlation Between Perpetua Resources and Vox Royalty

Can any of the company-specific risk be diversified away by investing in both Perpetua Resources and Vox Royalty 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 Perpetua Resources and Vox Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perpetua Resources Corp and Vox Royalty Corp, you can compare the effects of market volatilities on Perpetua Resources and Vox Royalty 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 Perpetua Resources with a short position of Vox Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetua Resources and Vox Royalty.

Diversification Opportunities for Perpetua Resources and Vox Royalty

-0.56

Correlation Coefficient

Perpetua Resources  Vox Royalty

Excellent diversification

The 3 months correlation between Perpetua and Vox is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Perpetua Resources Corp and Vox Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vox Royalty Corp and Perpetua Resources 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 Perpetua Resources Corp are associated (or correlated) with Vox Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vox Royalty Corp has no effect on the direction of Perpetua Resources i.e., Perpetua Resources and Vox Royalty go up and down completely randomly.

Pair Corralation between Perpetua Resources and Vox Royalty

Given the investment horizon of 90 days Perpetua Resources Corp is expected to generate 2.27 times more return on investment than Vox Royalty. However, Perpetua Resources is 2.27 times more volatile than Vox Royalty Corp. It trades about -0.08 of its potential returns per unit of risk. Vox Royalty Corp is currently generating about -0.23 per unit of risk. If you would invest  1,219  in Perpetua Resources Corp on October 8, 2024 and sell it today you would lose (111.00) from holding Perpetua Resources Corp or give up 9.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Perpetua Resources Corp  vs.  Vox Royalty Corp

Perpetua Resources Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetua Resources Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Perpetua Resources sustained solid returns over the last few months and may actually be approaching a breakup point.

Vox Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vox Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Perpetua Resources and Vox Royalty

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

The idea behind Perpetua Resources Corp and Vox Royalty 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.