Correlation Between Q Gold and Perseus Mining

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

By analyzing existing cross correlation between Q Gold Resources and Perseus Mining, you can compare the effects of market volatilities on Q Gold and Perseus Mining 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 Q Gold with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q Gold and Perseus Mining.

Diversification Opportunities for Q Gold and Perseus Mining

-0.44

Correlation Coefficient

Q Gold  Perseus Mining

Very good diversification

The 3 months correlation between QGR and Perseus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Q Gold Resources and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Q Gold 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 Q Gold Resources are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Q Gold i.e., Q Gold and Perseus Mining go up and down completely randomly.

Pair Corralation between Q Gold and Perseus Mining

Assuming the 90 days horizon Q Gold Resources is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, Q Gold Resources is 2.03 times less risky than Perseus Mining. The stock trades about -0.04 of its potential returns per unit of risk. The Perseus Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  113.00  in Perseus Mining on October 15, 2024 and sell it today you would earn a total of  123.00  from holding Perseus Mining or generate 108.85% return on investment over 90 days.

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

Q Gold Resources  vs.  Perseus Mining

Q Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Perseus Mining

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 9 (%) 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.

Pair Trading with Q Gold and Perseus Mining

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

The idea behind Q Gold Resources and Perseus Mining 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.