Correlation Between Perpetual Equity and Computershare

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

By analyzing existing cross correlation between Perpetual Equity Investment and Computershare, you can compare the effects of market volatilities on Perpetual Equity and Computershare 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 Perpetual Equity with a short position of Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Equity and Computershare.

Diversification Opportunities for Perpetual Equity and Computershare

0.43

Correlation Coefficient

Perpetual Equity  Computershare

Very weak diversification

The 3 months correlation between Perpetual and Computershare is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Equity Investment and Computershare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare and Perpetual Equity 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 Perpetual Equity Investment are associated (or correlated) with Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare has no effect on the direction of Perpetual Equity i.e., Perpetual Equity and Computershare go up and down completely randomly.

Pair Corralation between Perpetual Equity and Computershare

Assuming the 90 days trading horizon Perpetual Equity Investment is expected to generate 1.01 times more return on investment than Computershare. However, Perpetual Equity is 1.01 times more volatile than Computershare. It trades about 0.11 of its potential returns per unit of risk. Computershare is currently generating about 0.07 per unit of risk. If you would invest  116.00  in Perpetual Equity Investment on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Perpetual Equity Investment or generate 9.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Perpetual Equity Investment  vs.  Computershare

Perpetual Equity Inv

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetual Equity Investment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Perpetual Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Computershare

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Computershare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Perpetual Equity and Computershare

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

The idea behind Perpetual Equity Investment and Computershare 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.