Correlation Between Perseus Mining and NORTHERN OCEAN

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

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

Diversification Opportunities for Perseus Mining and NORTHERN OCEAN

0.23

Correlation Coefficient

Perseus Mining  NORTHERN OCEAN

Modest diversification

The 3 months correlation between Perseus and NORTHERN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and NORTHERN OCEAN LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN OCEAN LTD 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 Limited are associated (or correlated) with NORTHERN OCEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN OCEAN LTD has no effect on the direction of Perseus Mining i.e., Perseus Mining and NORTHERN OCEAN go up and down completely randomly.

Pair Corralation between Perseus Mining and NORTHERN OCEAN

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.94 times more return on investment than NORTHERN OCEAN. However, Perseus Mining Limited is 1.06 times less risky than NORTHERN OCEAN. It trades about 0.07 of its potential returns per unit of risk. NORTHERN OCEAN LTD is currently generating about 0.06 per unit of risk. If you would invest  183.00  in Perseus Mining Limited on April 25, 2025 and sell it today you would earn a total of  21.00  from holding Perseus Mining Limited or generate 11.48% 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 Limited  vs.  NORTHERN OCEAN LTD

Perseus Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining reported solid returns over the last few months and may actually be approaching a breakup point.

NORTHERN OCEAN LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHERN OCEAN LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NORTHERN OCEAN may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Perseus Mining and NORTHERN OCEAN

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

The idea behind Perseus Mining Limited and NORTHERN OCEAN LTD 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.