Correlation Between EPSILON HEALTHCARE and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE 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 EPSILON HEALTHCARE and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and Harmony Gold Mining, you can compare the effects of market volatilities on EPSILON HEALTHCARE 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 EPSILON HEALTHCARE with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Harmony Gold.
Diversification Opportunities for EPSILON HEALTHCARE and Harmony Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and Harmony is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE 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 EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Harmony Gold go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and Harmony Gold
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 4.22 times more return on investment than Harmony Gold. However, EPSILON HEALTHCARE is 4.22 times more volatile than Harmony Gold Mining. It trades about 0.05 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 per unit of risk. If you would invest 0.95 in EPSILON HEALTHCARE LTD on September 12, 2024 and sell it today you would lose (0.20) from holding EPSILON HEALTHCARE LTD or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. Harmony Gold Mining
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| Harmony Gold Mining |
EPSILON HEALTHCARE and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and Harmony Gold
The main advantage of trading using opposite EPSILON HEALTHCARE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE 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.| EPSILON HEALTHCARE vs. Merck Company | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. NMI Holdings |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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