Correlation Between Perseus Mining and Fresh Grapes

Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Fresh Grapes 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 Fresh Grapes 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 Fresh Grapes LLC, you can compare the effects of market volatilities on Perseus Mining and Fresh Grapes 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 Fresh Grapes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Fresh Grapes.

Diversification Opportunities for Perseus Mining and Fresh Grapes

-0.77

Correlation Coefficient

Perseus Mining  Fresh Grapes

Pay attention - limited upside

The 3 months correlation between Perseus and Fresh is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Fresh Grapes LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Grapes LLC 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 Fresh Grapes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Grapes LLC has no effect on the direction of Perseus Mining i.e., Perseus Mining and Fresh Grapes go up and down completely randomly.

Pair Corralation between Perseus Mining and Fresh Grapes

Assuming the 90 days horizon Perseus Mining Limited is expected to generate 0.42 times more return on investment than Fresh Grapes. However, Perseus Mining Limited is 2.39 times less risky than Fresh Grapes. It trades about 0.09 of its potential returns per unit of risk. Fresh Grapes LLC is currently generating about -0.09 per unit of risk. If you would invest  145.00  in Perseus Mining Limited on January 30, 2024 and sell it today you would earn a total of  6.00  from holding Perseus Mining Limited or generate 4.14% return on investment over 90 days.

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

Perseus Mining Limited  vs.  Fresh Grapes LLC

Perseus Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 11 (%) 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.

Fresh Grapes LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Grapes LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Perseus Mining and Fresh Grapes

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

The idea behind Perseus Mining Limited and Fresh Grapes LLC 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.