Correlation Between AWILCO DRILLING and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING and Harmony Gold 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 AWILCO DRILLING and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and Harmony Gold Mining, you can compare the effects of market volatilities on AWILCO DRILLING and Harmony Gold 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 AWILCO DRILLING with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and Harmony Gold.
Diversification Opportunities for AWILCO DRILLING and Harmony Gold
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between AWILCO and Harmony is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and AWILCO DRILLING 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 AWILCO DRILLING PLC are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of AWILCO DRILLING i.e., AWILCO DRILLING and Harmony Gold go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and Harmony Gold
Assuming the 90 days trading horizon AWILCO DRILLING PLC is expected to generate 4.38 times more return on investment than Harmony Gold. However, AWILCO DRILLING is 4.38 times more volatile than Harmony Gold Mining. It trades about 0.03 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 per unit of risk. If you would invest 692.00 in AWILCO DRILLING PLC on September 3, 2024 and sell it today you would lose (498.00) from holding AWILCO DRILLING PLC or give up 71.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. Harmony Gold Mining
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| Harmony Gold Mining |
AWILCO DRILLING and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and Harmony Gold
The main advantage of trading using opposite AWILCO DRILLING and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| AWILCO DRILLING vs. Unity Software | AWILCO DRILLING vs. Sims Metal Management | AWILCO DRILLING vs. CVS Health | AWILCO DRILLING vs. National Health Investors |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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