Correlation Between Perseus Mining and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Sun Hung 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 Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on Perseus Mining and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Sun Hung.
Diversification Opportunities for Perseus Mining and Sun Hung
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perseus and Sun is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of Perseus Mining i.e., Perseus Mining and Sun Hung go up and down completely randomly.
Pair Corralation between Perseus Mining and Sun Hung
Assuming the 90 days horizon Perseus Mining is expected to generate 1.19 times less return on investment than Sun Hung. But when comparing it to its historical volatility, Perseus Mining Limited is 1.06 times less risky than Sun Hung. It trades about 0.07 of its potential returns per unit of risk. Sun Hung Kai is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 581.00 in Sun Hung Kai on September 4, 2024 and sell it today you would earn a total of 354.00 from holding Sun Hung Kai or generate 60.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. Sun Hung Kai
Performance |
| Timeline |
| Perseus Mining |
| Sun Hung Kai |
Perseus Mining and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Sun Hung
The main advantage of trading using opposite Perseus Mining and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| Sun Hung vs. Jacquet Metal Service | Sun Hung vs. Perseus Mining Limited | Sun Hung vs. MCEWEN MINING INC | Sun Hung vs. GRIFFIN MINING LTD |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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