Correlation Between Carboclor and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Carboclor 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 Carboclor and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carboclor and Harmony Gold Mining, you can compare the effects of market volatilities on Carboclor 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 Carboclor with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carboclor and Harmony Gold.
Diversification Opportunities for Carboclor and Harmony Gold
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carboclor and Harmony is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carboclor 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 Carboclor 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 Carboclor 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 Carboclor i.e., Carboclor and Harmony Gold go up and down completely randomly.
Pair Corralation between Carboclor and Harmony Gold
Assuming the 90 days trading horizon Carboclor is expected to generate 1.09 times more return on investment than Harmony Gold. However, Carboclor is 1.09 times more volatile than Harmony Gold Mining. It trades about 0.28 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.07 per unit of risk. If you would invest 2,830 in Carboclor on September 13, 2024 and sell it today you would earn a total of 705.00 from holding Carboclor or generate 24.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carboclor vs. Harmony Gold Mining
Performance |
| Timeline |
| Carboclor |
| Harmony Gold Mining |
Carboclor and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carboclor and Harmony Gold
The main advantage of trading using opposite Carboclor and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carboclor 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.| Carboclor vs. Harmony Gold Mining | Carboclor vs. Compania de Transporte | Carboclor vs. United States Steel | Carboclor vs. Transportadora de Gas |
| Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
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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