Correlation Between Charter Communications and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Harmony Gold Mining, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Harmony Gold.
Diversification Opportunities for Charter Communications and Harmony Gold
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and Harmony is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications 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 Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and Harmony Gold go up and down completely randomly.
Pair Corralation between Charter Communications and Harmony Gold
Assuming the 90 days trading horizon Charter Communications is expected to generate 4.31 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Charter Communications is 1.9 times less risky than Harmony Gold. It trades about 0.21 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Harmony Gold Mining on October 30, 2024 and sell it today you would earn a total of 210.00 from holding Harmony Gold Mining or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. Harmony Gold Mining
Performance |
| Timeline |
| Charter Communications |
| Harmony Gold Mining |
Charter Communications and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and Harmony Gold
The main advantage of trading using opposite Charter Communications and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.| Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc | Charter Communications vs. Apple Inc |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. Origin Agritech |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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