Correlation Between Live Nation and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Live Nation 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 Live Nation and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment and Harmony Gold Mining, you can compare the effects of market volatilities on Live Nation 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 Live Nation with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and Harmony Gold.
Diversification Opportunities for Live Nation and Harmony Gold
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Live and Harmony is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment 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 Live Nation 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 Live Nation Entertainment 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 Live Nation i.e., Live Nation and Harmony Gold go up and down completely randomly.
Pair Corralation between Live Nation and Harmony Gold
Assuming the 90 days horizon Live Nation is expected to generate 1.4 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Live Nation Entertainment is 1.75 times less risky than Harmony Gold. It trades about 0.09 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Harmony Gold Mining on August 31, 2024 and sell it today you would earn a total of 490.00 from holding Harmony Gold Mining or generate 138.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Nation Entertainment vs. Harmony Gold Mining
Performance |
| Timeline |
| Live Nation Entertainment |
| Harmony Gold Mining |
Live Nation and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and Harmony Gold
The main advantage of trading using opposite Live Nation and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation 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.| Live Nation vs. PLAYTECH | Live Nation vs. Playa Hotels Resorts | Live Nation vs. Sixt Leasing SE | Live Nation vs. Madison Square Garden |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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