Correlation Between Canlan Ice and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Harmony Gold Mining, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Harmony Gold.
Diversification Opportunities for Canlan Ice and Harmony Gold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canlan and Harmony is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports 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 Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Harmony Gold go up and down completely randomly.
Pair Corralation between Canlan Ice and Harmony Gold
Assuming the 90 days horizon Canlan Ice is expected to generate 15.67 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Canlan Ice Sports is 32.08 times less risky than Harmony Gold. It trades about 0.14 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 588.00 in Harmony Gold Mining on September 2, 2024 and sell it today you would earn a total of 331.00 from holding Harmony Gold Mining or generate 56.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Harmony Gold Mining
Performance |
| Timeline |
| Canlan Ice Sports |
| Harmony Gold Mining |
Canlan Ice and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Harmony Gold
The main advantage of trading using opposite Canlan Ice and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. Kite Realty Group | Canlan Ice vs. Alaska Air Group | Canlan Ice vs. Stepstone Group | Canlan Ice vs. Tencent Music Entertainment |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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