Correlation Between Perseus Mining and Harvey Norman
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and Harvey Norman 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 Harvey Norman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining and Harvey Norman Holdings, you can compare the effects of market volatilities on Perseus Mining and Harvey Norman 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 Harvey Norman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and Harvey Norman.
Diversification Opportunities for Perseus Mining and Harvey Norman
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perseus and Harvey is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining and Harvey Norman Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvey Norman Holdings 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 are associated (or correlated) with Harvey Norman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvey Norman Holdings has no effect on the direction of Perseus Mining i.e., Perseus Mining and Harvey Norman go up and down completely randomly.
Pair Corralation between Perseus Mining and Harvey Norman
Assuming the 90 days trading horizon Perseus Mining is expected to under-perform the Harvey Norman. In addition to that, Perseus Mining is 1.81 times more volatile than Harvey Norman Holdings. It trades about -0.16 of its total potential returns per unit of risk. Harvey Norman Holdings is currently generating about 0.18 per unit of volatility. If you would invest 456.00 in Harvey Norman Holdings on September 4, 2024 and sell it today you would earn a total of 22.00 from holding Harvey Norman Holdings or generate 4.82% 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 vs. Harvey Norman Holdings
Performance |
| Timeline |
| Perseus Mining |
| Harvey Norman Holdings |
Perseus Mining and Harvey Norman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and Harvey Norman
The main advantage of trading using opposite Perseus Mining and Harvey Norman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, Harvey Norman 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 Harvey Norman will offset losses from the drop in Harvey Norman's long position.| Perseus Mining vs. Northern Star Resources | Perseus Mining vs. Evolution Mining | Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Sandfire Resources NL |
| Harvey Norman vs. Air New Zealand | Harvey Norman vs. Ironbark Capital | Harvey Norman vs. ARN Media Limited | Harvey Norman vs. Bisalloy Steel Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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