Correlation Between Perseus Mining and Sequoia Financial

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

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

Diversification Opportunities for Perseus Mining and Sequoia Financial

0.07

Correlation Coefficient

Perseus Mining  Sequoia Financial

Significant diversification

The 3 months correlation between Perseus and Sequoia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Sequoia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Financial 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 Sequoia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequoia Financial has no effect on the direction of Perseus Mining i.e., Perseus Mining and Sequoia Financial go up and down completely randomly.

Pair Corralation between Perseus Mining and Sequoia Financial

Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.94 times more return on investment than Sequoia Financial. However, Perseus Mining is 1.06 times less risky than Sequoia Financial. It trades about 0.03 of its potential returns per unit of risk. Sequoia Financial Group is currently generating about -0.01 per unit of risk. If you would invest  205.00  in Perseus Mining on September 18, 2024 and sell it today you would earn a total of  62.00  from holding Perseus Mining or generate 30.24% return on investment over 90 days.

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

Perseus Mining  vs.  Sequoia Financial Group

Perseus Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 3 (%) 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.

Sequoia Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sequoia Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sequoia Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Perseus Mining and Sequoia Financial

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

The idea behind Perseus Mining and Sequoia Financial Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.