Correlation Between ESSILORLUXOTTICA and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both ESSILORLUXOTTICA 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 ESSILORLUXOTTICA and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and Harmony Gold Mining, you can compare the effects of market volatilities on ESSILORLUXOTTICA 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 ESSILORLUXOTTICA with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and Harmony Gold.
Diversification Opportunities for ESSILORLUXOTTICA and Harmony Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ESSILORLUXOTTICA and Harmony is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and Harmony Gold go up and down completely randomly.
Pair Corralation between ESSILORLUXOTTICA and Harmony Gold
Assuming the 90 days trading horizon ESSILORLUXOTTICA 12ON is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, ESSILORLUXOTTICA 12ON is 2.9 times less risky than Harmony Gold. The stock trades about -0.04 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Harmony Gold Mining or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ESSILORLUXOTTICA 12ON vs. Harmony Gold Mining
Performance |
| Timeline |
| ESSILORLUXOTTICA 12ON |
| Harmony Gold Mining |
ESSILORLUXOTTICA and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSILORLUXOTTICA and Harmony Gold
The main advantage of trading using opposite ESSILORLUXOTTICA and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSILORLUXOTTICA 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.| ESSILORLUXOTTICA vs. INVITATION HOMES DL | ESSILORLUXOTTICA vs. MUTUIONLINE | ESSILORLUXOTTICA vs. HomeToGo SE | ESSILORLUXOTTICA vs. DFS Furniture PLC |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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