Correlation Between Perseus Mining and Regal Investment

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

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

Diversification Opportunities for Perseus Mining and Regal Investment

0.39

Correlation Coefficient

Perseus Mining  Regal Investment

Weak diversification

The 3 months correlation between Perseus and Regal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment 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 Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of Perseus Mining i.e., Perseus Mining and Regal Investment go up and down completely randomly.

Pair Corralation between Perseus Mining and Regal Investment

Assuming the 90 days trading horizon Perseus Mining is expected to generate 1.62 times more return on investment than Regal Investment. However, Perseus Mining is 1.62 times more volatile than Regal Investment. It trades about 0.06 of its potential returns per unit of risk. Regal Investment is currently generating about 0.09 per unit of risk. If you would invest  259.00  in Perseus Mining on September 13, 2024 and sell it today you would earn a total of  19.00  from holding Perseus Mining or generate 7.34% return on investment over 90 days.

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

Perseus Mining  vs.  Regal Investment

Perseus Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Regal Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Regal Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Perseus Mining and Regal Investment

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

The idea behind Perseus Mining and Regal Investment 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.