Correlation Between Xenia Hotels and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels 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 Xenia Hotels and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Harmony Gold Mining, you can compare the effects of market volatilities on Xenia Hotels 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 Xenia Hotels with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Harmony Gold.
Diversification Opportunities for Xenia Hotels and Harmony Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and Harmony is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts 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 Xenia Hotels 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 Xenia Hotels Resorts 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 Xenia Hotels i.e., Xenia Hotels and Harmony Gold go up and down completely randomly.
Pair Corralation between Xenia Hotels and Harmony Gold
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 7.72 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.81 times less risky than Harmony Gold. It trades about 0.02 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Harmony Gold Mining on November 5, 2024 and sell it today you would earn a total of 770.00 from holding Harmony Gold Mining or generate 256.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Harmony Gold Mining
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Harmony Gold Mining |
Xenia Hotels and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Harmony Gold
The main advantage of trading using opposite Xenia Hotels and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels 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.| Xenia Hotels vs. Gaztransport Technigaz SA | Xenia Hotels vs. SCANSOURCE | Xenia Hotels vs. Alfa Financial Software | Xenia Hotels vs. Casio Computer CoLtd |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Franco Nevada |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |