Correlation Between Perseus Mining and Huaneng Power
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Huaneng Power 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 Huaneng Power 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 Huaneng Power International, you can compare the effects of market volatilities on Perseus Mining and Huaneng Power 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 Huaneng Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Huaneng Power.
Diversification Opportunities for Perseus Mining and Huaneng Power
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and Huaneng is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Huaneng Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Power Intern 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 Huaneng Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Power Intern has no effect on the direction of Perseus Mining i.e., Perseus Mining and Huaneng Power go up and down completely randomly.
Pair Corralation between Perseus Mining and Huaneng Power
Assuming the 90 days horizon Perseus Mining Limited is expected to generate 1.02 times more return on investment than Huaneng Power. However, Perseus Mining is 1.02 times more volatile than Huaneng Power International. It trades about 0.05 of its potential returns per unit of risk. Huaneng Power International is currently generating about -0.02 per unit of risk. If you would invest 163.00 in Perseus Mining Limited on October 28, 2024 and sell it today you would earn a total of 5.00 from holding Perseus Mining Limited or generate 3.07% 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. Huaneng Power International
Performance |
| Timeline |
| Perseus Mining |
| Huaneng Power Intern |
Perseus Mining and Huaneng Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Huaneng Power
The main advantage of trading using opposite Perseus Mining and Huaneng Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Huaneng Power 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 Huaneng Power will offset losses from the drop in Huaneng Power's long position.| Perseus Mining vs. Cognizant Technology Solutions | Perseus Mining vs. PICKN PAY STORES | Perseus Mining vs. RETAIL FOOD GROUP | Perseus Mining vs. Ross Stores |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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