Correlation Between Perseus Mining and Vistra Energy
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Vistra Energy 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 Vistra Energy 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 Vistra Energy Corp, you can compare the effects of market volatilities on Perseus Mining and Vistra Energy 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 Vistra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Vistra Energy.
Diversification Opportunities for Perseus Mining and Vistra Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and Vistra is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and Vistra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vistra Energy Corp 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 Vistra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vistra Energy Corp has no effect on the direction of Perseus Mining i.e., Perseus Mining and Vistra Energy go up and down completely randomly.
Pair Corralation between Perseus Mining and Vistra Energy
Assuming the 90 days horizon Perseus Mining is expected to generate 3.59 times less return on investment than Vistra Energy. But when comparing it to its historical volatility, Perseus Mining Limited is 1.22 times less risky than Vistra Energy. It trades about 0.04 of its potential returns per unit of risk. Vistra Energy Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,279 in Vistra Energy Corp on August 30, 2024 and sell it today you would earn a total of 6,173 from holding Vistra Energy Corp or generate 66.53% 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. Vistra Energy Corp
Performance |
| Timeline |
| Perseus Mining |
| Vistra Energy Corp |
Perseus Mining and Vistra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Vistra Energy
The main advantage of trading using opposite Perseus Mining and Vistra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Vistra Energy 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 Vistra Energy will offset losses from the drop in Vistra Energy's long position.| Perseus Mining vs. Vertiv Holdings Co | Perseus Mining vs. Nasdaq Inc | Perseus Mining vs. McDonalds | Perseus Mining vs. Walmart |
| Vistra Energy vs. Pampa Energia SA | Vistra Energy vs. TransAlta Corp | Vistra Energy vs. Kenon Holdings | Vistra Energy vs. NRG Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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