Correlation Between Perseus Mining and Hansen Technologies

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Hansen Technologies 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 Hansen Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perseus Mining and Hansen Technologies, you can compare the effects of market volatilities on Perseus Mining and Hansen Technologies 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 Hansen Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Hansen Technologies.

Diversification Opportunities for Perseus Mining and Hansen Technologies

-0.31

Correlation Coefficient

Perseus Mining  Hansen Technologies

Very good diversification

The 3 months correlation between Perseus and Hansen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies 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 are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Perseus Mining i.e., Perseus Mining and Hansen Technologies go up and down completely randomly.

Pair Corralation between Perseus Mining and Hansen Technologies

Assuming the 90 days trading horizon Perseus Mining is expected to under-perform the Hansen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Perseus Mining is 1.08 times less risky than Hansen Technologies. The stock trades about -0.15 of its potential returns per unit of risk. The Hansen Technologies is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  559.00  in Hansen Technologies on October 8, 2024 and sell it today you would lose (18.00) from holding Hansen Technologies or give up 3.22% of portfolio value over 90 days.

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

Perseus Mining  vs.  Hansen Technologies

Perseus Mining

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Perseus Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hansen Technologies

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perseus Mining and Hansen Technologies

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

The idea behind Perseus Mining and Hansen Technologies 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.

Check out your portfolio center.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.