Correlation Between PPHE HOTEL and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL 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 PPHE HOTEL and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Harmony Gold Mining, you can compare the effects of market volatilities on PPHE HOTEL 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 PPHE HOTEL with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Harmony Gold.
Diversification Opportunities for PPHE HOTEL and Harmony Gold
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Harmony is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP 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 PPHE HOTEL 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 PPHE HOTEL GROUP 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 PPHE HOTEL i.e., PPHE HOTEL and Harmony Gold go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Harmony Gold
Assuming the 90 days trading horizon PPHE HOTEL is expected to generate 3.33 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, PPHE HOTEL GROUP is 2.04 times less risky than Harmony Gold. It trades about 0.06 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 312.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 543.00 from holding Harmony Gold Mining or generate 174.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Harmony Gold Mining
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Harmony Gold Mining |
PPHE HOTEL and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Harmony Gold
The main advantage of trading using opposite PPHE HOTEL and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL 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.The idea behind PPHE HOTEL GROUP and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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