Correlation Between American Virtual and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both American Virtual 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 American Virtual and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Virtual Cloud and Harmony Gold Mining, you can compare the effects of market volatilities on American Virtual 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 American Virtual with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Virtual and Harmony Gold.
Diversification Opportunities for American Virtual and Harmony Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Harmony is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding American Virtual Cloud 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 American Virtual 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 American Virtual Cloud 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 American Virtual i.e., American Virtual and Harmony Gold go up and down completely randomly.
Pair Corralation between American Virtual and Harmony Gold
If you would invest 950.00 in Harmony Gold Mining on October 21, 2024 and sell it today you would lose (1.00) from holding Harmony Gold Mining or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
American Virtual Cloud vs. Harmony Gold Mining
Performance |
| Timeline |
| American Virtual Cloud |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Harmony Gold Mining |
American Virtual and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Virtual and Harmony Gold
The main advantage of trading using opposite American Virtual and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Virtual 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.| American Virtual vs. Saia Inc | American Virtual vs. Hafnia Limited | American Virtual vs. Emerson Radio | American Virtual vs. Sphere Entertainment Co |
| Harmony Gold vs. Marimaca Copper Corp | Harmony Gold vs. Sea | Harmony Gold vs. Cardinal Health | Harmony Gold vs. Zijin Mining Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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