Correlation Between Embecta Corp and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Embecta Corp 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 Embecta Corp and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embecta Corp and Harmony Gold Mining, you can compare the effects of market volatilities on Embecta Corp 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 Embecta Corp with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embecta Corp and Harmony Gold.
Diversification Opportunities for Embecta Corp and Harmony Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embecta and Harmony is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp 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 Embecta Corp 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 Embecta Corp 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 Embecta Corp i.e., Embecta Corp and Harmony Gold go up and down completely randomly.
Pair Corralation between Embecta Corp and Harmony Gold
Given the investment horizon of 90 days Embecta Corp is expected to generate 7.2 times less return on investment than Harmony Gold. In addition to that, Embecta Corp is 1.13 times more volatile than Harmony Gold Mining. It trades about 0.01 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 per unit of volatility. If you would invest 455.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 437.00 from holding Harmony Gold Mining or generate 96.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embecta Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Embecta Corp |
| Harmony Gold Mining |
Embecta Corp and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embecta Corp and Harmony Gold
The main advantage of trading using opposite Embecta Corp and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embecta Corp 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.| Embecta Corp vs. Baxter International | Embecta Corp vs. West Pharmaceutical Services | Embecta Corp vs. ResMed Inc | Embecta Corp vs. The Cooper Companies, |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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