Correlation Between POSBO UNSPADRS/20YC1 and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSBO UNSPADRS20YC1 and Harmony Gold Mining, you can compare the effects of market volatilities on POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSBO UNSPADRS/20YC1 and Harmony Gold.
Diversification Opportunities for POSBO UNSPADRS/20YC1 and Harmony Gold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POSBO and Harmony is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding POSBO UNSPADRS20YC1 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 POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS20YC1 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 POSBO UNSPADRS/20YC1 i.e., POSBO UNSPADRS/20YC1 and Harmony Gold go up and down completely randomly.
Pair Corralation between POSBO UNSPADRS/20YC1 and Harmony Gold
Assuming the 90 days trading horizon POSBO UNSPADRS/20YC1 is expected to generate 1.1 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, POSBO UNSPADRS20YC1 is 1.5 times less risky than Harmony Gold. It trades about 0.1 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 541.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 309.00 from holding Harmony Gold Mining or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSBO UNSPADRS20YC1 vs. Harmony Gold Mining
Performance |
| Timeline |
| POSBO UNSPADRS/20YC1 |
| Harmony Gold Mining |
POSBO UNSPADRS/20YC1 and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSBO UNSPADRS/20YC1 and Harmony Gold
The main advantage of trading using opposite POSBO UNSPADRS/20YC1 and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSBO UNSPADRS/20YC1 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.| POSBO UNSPADRS/20YC1 vs. Harmony Gold Mining | POSBO UNSPADRS/20YC1 vs. GALENA MINING LTD | POSBO UNSPADRS/20YC1 vs. MAGIC SOFTWARE ENTR | POSBO UNSPADRS/20YC1 vs. ASURE SOFTWARE |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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