Correlation Between Chemours and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Harmony Gold Mining, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Harmony Gold.
Diversification Opportunities for Chemours and Harmony Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemours and Harmony is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co 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 Chemours 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 Chemours Co 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 Chemours i.e., Chemours and Harmony Gold go up and down completely randomly.
Pair Corralation between Chemours and Harmony Gold
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 0.87 times more return on investment than Harmony Gold. However, Chemours Co is 1.14 times less risky than Harmony Gold. It trades about 0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.05 per unit of risk. If you would invest 2,006 in Chemours Co on August 31, 2024 and sell it today you would earn a total of 176.00 from holding Chemours Co or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Harmony Gold Mining
Performance |
| Timeline |
| Chemours |
| Harmony Gold Mining |
Chemours and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Harmony Gold
The main advantage of trading using opposite Chemours and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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