Correlation Between CHUGOKU EL and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both CHUGOKU EL 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 CHUGOKU EL and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHUGOKU EL PWR and Harmony Gold Mining, you can compare the effects of market volatilities on CHUGOKU EL 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 CHUGOKU EL with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHUGOKU EL and Harmony Gold.
Diversification Opportunities for CHUGOKU EL and Harmony Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHUGOKU and Harmony is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CHUGOKU EL PWR 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 CHUGOKU EL 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 CHUGOKU EL PWR 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 CHUGOKU EL i.e., CHUGOKU EL and Harmony Gold go up and down completely randomly.
Pair Corralation between CHUGOKU EL and Harmony Gold
Assuming the 90 days horizon CHUGOKU EL PWR is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, CHUGOKU EL PWR is 1.28 times less risky than Harmony Gold. The stock trades about -0.09 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 830.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 240.00 from holding Harmony Gold Mining or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CHUGOKU EL PWR vs. Harmony Gold Mining
Performance |
| Timeline |
| CHUGOKU EL PWR |
| Harmony Gold Mining |
CHUGOKU EL and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHUGOKU EL and Harmony Gold
The main advantage of trading using opposite CHUGOKU EL and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHUGOKU EL 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.| CHUGOKU EL vs. Chesapeake Utilities | CHUGOKU EL vs. Sun Life Financial | CHUGOKU EL vs. Chiba Bank | CHUGOKU EL vs. CullenFrost Bankers |
| Harmony Gold vs. ePlay Digital | Harmony Gold vs. InPlay Oil Corp | Harmony Gold vs. Sun Life Financial | Harmony Gold vs. Chiba Bank |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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