Correlation Between SL Green and Perseus Mining

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

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

Diversification Opportunities for SL Green and Perseus Mining

-0.72

Correlation Coefficient

SL Green  Perseus Mining

Pay attention - limited upside

The 3 months correlation between SLG and Perseus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and Perseus Mining go up and down completely randomly.

Pair Corralation between SL Green and Perseus Mining

Considering the 90-day investment horizon SL Green Realty is expected to under-perform the Perseus Mining. But the stock apears to be less risky and, when comparing its historical volatility, SL Green Realty is 1.14 times less risky than Perseus Mining. The stock trades about -0.07 of its potential returns per unit of risk. The Perseus Mining Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  157.00  in Perseus Mining Limited on December 27, 2024 and sell it today you would earn a total of  43.00  from holding Perseus Mining Limited or generate 27.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

SL Green Realty  vs.  Perseus Mining Limited

SL Green Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days SL Green Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Perseus Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SL Green and Perseus Mining

The main advantage of trading using opposite SL Green and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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 SL Green Realty and Perseus Mining Limited 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.