Correlation Between Exco Technologies and Perseus Mining

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

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

Diversification Opportunities for Exco Technologies and Perseus Mining

0.38

Correlation Coefficient

Exco Technologies  Perseus Mining

Weak diversification

The 3 months correlation between Exco and Perseus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Exco Technologies Limited and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Exco Technologies 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 Exco Technologies Limited 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 Exco Technologies i.e., Exco Technologies and Perseus Mining go up and down completely randomly.

Pair Corralation between Exco Technologies and Perseus Mining

Assuming the 90 days trading horizon Exco Technologies Limited is expected to generate 0.73 times more return on investment than Perseus Mining. However, Exco Technologies Limited is 1.37 times less risky than Perseus Mining. It trades about 0.16 of its potential returns per unit of risk. Perseus Mining is currently generating about 0.08 per unit of risk. If you would invest  563.00  in Exco Technologies Limited on April 25, 2025 and sell it today you would earn a total of  103.00  from holding Exco Technologies Limited or generate 18.29% return on investment over 90 days.

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

Exco Technologies Limited  vs.  Perseus Mining

Exco Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exco Technologies Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Exco Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Perseus Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Perseus Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exco Technologies and Perseus Mining

The main advantage of trading using opposite Exco Technologies and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exco Technologies 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 Exco Technologies Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.