Correlation Between Perseus Mining and Santana Minerals

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

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

Diversification Opportunities for Perseus Mining and Santana Minerals

0.38

Correlation Coefficient

Perseus Mining  Santana Minerals

Weak diversification

The 3 months correlation between Perseus and Santana is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Santana Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santana Minerals 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 Santana Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santana Minerals has no effect on the direction of Perseus Mining i.e., Perseus Mining and Santana Minerals go up and down completely randomly.

Pair Corralation between Perseus Mining and Santana Minerals

Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.42 times more return on investment than Santana Minerals. However, Perseus Mining is 2.38 times less risky than Santana Minerals. It trades about 0.02 of its potential returns per unit of risk. Santana Minerals is currently generating about -0.1 per unit of risk. If you would invest  258.00  in Perseus Mining on October 4, 2024 and sell it today you would earn a total of  3.00  from holding Perseus Mining or generate 1.16% 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.  Santana Minerals

Perseus Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 1 (%) 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.

Santana Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santana Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Perseus Mining and Santana Minerals

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

The idea behind Perseus Mining and Santana Minerals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..