Correlation Between Perseus Mining and NVIDIA CDR

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

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

Diversification Opportunities for Perseus Mining and NVIDIA CDR

-0.79

Correlation Coefficient

Perseus Mining  NVIDIA CDR

Pay attention - limited upside

The 3 months correlation between Perseus and NVIDIA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and NVIDIA CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA CDR 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 NVIDIA CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA CDR has no effect on the direction of Perseus Mining i.e., Perseus Mining and NVIDIA CDR go up and down completely randomly.

Pair Corralation between Perseus Mining and NVIDIA CDR

Assuming the 90 days trading horizon Perseus Mining is expected to generate 0.44 times more return on investment than NVIDIA CDR. However, Perseus Mining is 2.29 times less risky than NVIDIA CDR. It trades about 0.25 of its potential returns per unit of risk. NVIDIA CDR is currently generating about -0.06 per unit of risk. If you would invest  226.00  in Perseus Mining on December 31, 2024 and sell it today you would earn a total of  71.00  from holding Perseus Mining or generate 31.42% return on investment over 90 days.

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

Perseus Mining  vs.  NVIDIA CDR

Perseus Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Perseus Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

NVIDIA CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA CDR 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Perseus Mining and NVIDIA CDR

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

The idea behind Perseus Mining and NVIDIA CDR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.