Correlation Between Air Lease and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Harmony Gold Mining, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Harmony Gold.
Diversification Opportunities for Air Lease and Harmony Gold
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Harmony is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease 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 Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Harmony Gold go up and down completely randomly.
Pair Corralation between Air Lease and Harmony Gold
Assuming the 90 days trading horizon Air Lease is expected to generate 0.6 times more return on investment than Harmony Gold. However, Air Lease is 1.67 times less risky than Harmony Gold. It trades about 0.05 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.02 per unit of risk. If you would invest 4,276 in Air Lease on September 1, 2024 and sell it today you would earn a total of 484.00 from holding Air Lease or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Harmony Gold Mining
Performance |
| Timeline |
| Air Lease |
| Harmony Gold Mining |
Air Lease and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Harmony Gold
The main advantage of trading using opposite Air Lease and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Caseys General Stores | Air Lease vs. Ping An Insurance | Air Lease vs. Selective Insurance Group | Air Lease vs. The Hanover Insurance |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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