Correlation Between Cache Exploration and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Cache Exploration 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 Cache Exploration and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cache Exploration and Harmony Gold Mining, you can compare the effects of market volatilities on Cache Exploration 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 Cache Exploration with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cache Exploration and Harmony Gold.
Diversification Opportunities for Cache Exploration and Harmony Gold
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cache and Harmony is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cache Exploration 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 Cache Exploration 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 Cache Exploration 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 Cache Exploration i.e., Cache Exploration and Harmony Gold go up and down completely randomly.
Pair Corralation between Cache Exploration and Harmony Gold
Assuming the 90 days horizon Cache Exploration is expected to under-perform the Harmony Gold. In addition to that, Cache Exploration is 3.55 times more volatile than Harmony Gold Mining. It trades about -0.12 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.02 per unit of volatility. If you would invest 947.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Harmony Gold Mining or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cache Exploration vs. Harmony Gold Mining
Performance |
| Timeline |
| Cache Exploration |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Harmony Gold Mining |
Cache Exploration and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cache Exploration and Harmony Gold
The main advantage of trading using opposite Cache Exploration and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cache Exploration 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.| Cache Exploration vs. Evolution Mining | Cache Exploration vs. Northern Star Resources | Cache Exploration vs. Wesdome Gold Mines | Cache Exploration vs. Centerra Gold |
| Harmony Gold vs. Fortitude Gold Corp | Harmony Gold vs. New Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. GoldMining |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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