Correlation Between Harris Technology and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Harris Technology 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 Harris Technology and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harris Technology Group and Perseus Mining, you can compare the effects of market volatilities on Harris Technology 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 Harris Technology with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harris Technology and Perseus Mining.
Diversification Opportunities for Harris Technology and Perseus Mining
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harris and Perseus is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Harris Technology Group and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Harris Technology 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 Harris Technology Group 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 Harris Technology i.e., Harris Technology and Perseus Mining go up and down completely randomly.
Pair Corralation between Harris Technology and Perseus Mining
Assuming the 90 days trading horizon Harris Technology Group is expected to generate 2.75 times more return on investment than Perseus Mining. However, Harris Technology is 2.75 times more volatile than Perseus Mining. It trades about 0.02 of its potential returns per unit of risk. Perseus Mining is currently generating about 0.04 per unit of risk. If you would invest 1.70 in Harris Technology Group on September 13, 2024 and sell it today you would lose (0.60) from holding Harris Technology Group or give up 35.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.38% |
| Values | Daily Returns |
Harris Technology Group vs. Perseus Mining
Performance |
| Timeline |
| Harris Technology |
| Perseus Mining |
Harris Technology and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harris Technology and Perseus Mining
The main advantage of trading using opposite Harris Technology and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harris Technology 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.| Harris Technology vs. Perseus Mining | Harris Technology vs. Falcon Metals | Harris Technology vs. Macquarie Bank Limited | Harris Technology vs. Magellan Financial Group |
| Perseus Mining vs. Gold Road Resources | Perseus Mining vs. Alto Metals | Perseus Mining vs. Charter Hall Education | Perseus Mining vs. Australian Strategic Materials |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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