Correlation Between Trip Group and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Trip Group 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 Trip Group and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trip Group Limited and Harmony Gold Mining, you can compare the effects of market volatilities on Trip Group 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 Trip Group with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trip Group and Harmony Gold.
Diversification Opportunities for Trip Group and Harmony Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trip and Harmony is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Trip Group Limited 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 Trip Group 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 Trip Group Limited 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 Trip Group i.e., Trip Group and Harmony Gold go up and down completely randomly.
Pair Corralation between Trip Group and Harmony Gold
Assuming the 90 days horizon Trip Group Limited is expected to generate 0.71 times more return on investment than Harmony Gold. However, Trip Group Limited is 1.4 times less risky than Harmony Gold. It trades about 0.11 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.08 per unit of risk. If you would invest 5,760 in Trip Group Limited on August 28, 2024 and sell it today you would earn a total of 360.00 from holding Trip Group Limited or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trip Group Limited vs. Harmony Gold Mining
Performance |
| Timeline |
| Trip Group Limited |
| Harmony Gold Mining |
Trip Group and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trip Group and Harmony Gold
The main advantage of trading using opposite Trip Group and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trip Group 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.| Trip Group vs. Columbia Sportswear | Trip Group vs. China Resources Beer | Trip Group vs. THAI BEVERAGE | Trip Group vs. DICKS Sporting Goods |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Agnico Eagle Mines | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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