Correlation Between LANDSEA HOMES and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both LANDSEA HOMES 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 LANDSEA HOMES and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANDSEA HOMES P and Harmony Gold Mining, you can compare the effects of market volatilities on LANDSEA HOMES 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 LANDSEA HOMES with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANDSEA HOMES and Harmony Gold.
Diversification Opportunities for LANDSEA HOMES and Harmony Gold
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LANDSEA and Harmony is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA HOMES P 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 LANDSEA HOMES 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 LANDSEA HOMES P 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 LANDSEA HOMES i.e., LANDSEA HOMES and Harmony Gold go up and down completely randomly.
Pair Corralation between LANDSEA HOMES and Harmony Gold
Assuming the 90 days horizon LANDSEA HOMES is expected to generate 3.33 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, LANDSEA HOMES P is 1.01 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 0.08 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Harmony Gold Mining on December 4, 2024 and sell it today you would earn a total of 568.00 from holding Harmony Gold Mining or generate 166.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
LANDSEA HOMES P vs. Harmony Gold Mining
Performance |
| Timeline |
| LANDSEA HOMES P |
| Harmony Gold Mining |
LANDSEA HOMES and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANDSEA HOMES and Harmony Gold
The main advantage of trading using opposite LANDSEA HOMES and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA HOMES 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.| LANDSEA HOMES vs. Magic Software Enterprises | LANDSEA HOMES vs. Constellation Software | LANDSEA HOMES vs. Alfa Financial Software | LANDSEA HOMES vs. Take Two Interactive Software |
| Harmony Gold vs. Canadian Utilities Limited | Harmony Gold vs. INTERSHOP Communications Aktiengesellschaft | Harmony Gold vs. Chengdu PUTIAN Telecommunications | Harmony Gold vs. NORTHEAST UTILITIES |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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