Correlation Between Harmony Gold and Controladora Vuela
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Controladora Vuela 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 Harmony Gold and Controladora Vuela into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Gold Mining and Controladora Vuela Compaa, you can compare the effects of market volatilities on Harmony Gold and Controladora Vuela 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 Harmony Gold with a short position of Controladora Vuela. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Controladora Vuela.
Diversification Opportunities for Harmony Gold and Controladora Vuela
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Controladora is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Controladora Vuela Compaa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Controladora Vuela Compaa and Harmony Gold 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 Harmony Gold Mining are associated (or correlated) with Controladora Vuela. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Controladora Vuela Compaa has no effect on the direction of Harmony Gold i.e., Harmony Gold and Controladora Vuela go up and down completely randomly.
Pair Corralation between Harmony Gold and Controladora Vuela
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Controladora Vuela. In addition to that, Harmony Gold is 1.47 times more volatile than Controladora Vuela Compaa. It trades about -0.08 of its total potential returns per unit of risk. Controladora Vuela Compaa is currently generating about 0.06 per unit of volatility. If you would invest 705.00 in Controladora Vuela Compaa on October 11, 2024 and sell it today you would earn a total of 25.00 from holding Controladora Vuela Compaa or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Controladora Vuela Compaa
Performance |
| Timeline |
| Harmony Gold Mining |
| Controladora Vuela Compaa |
Harmony Gold and Controladora Vuela Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Controladora Vuela
The main advantage of trading using opposite Harmony Gold and Controladora Vuela positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Controladora Vuela 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 Controladora Vuela will offset losses from the drop in Controladora Vuela's long position.| Harmony Gold vs. Corporate Office Properties | Harmony Gold vs. SILVER BULLET DATA | Harmony Gold vs. alstria office REIT AG | Harmony Gold vs. CITY OFFICE REIT |
| Controladora Vuela vs. INTER CARS SA | Controladora Vuela vs. IDP EDUCATION LTD | Controladora Vuela vs. Commercial Vehicle Group | Controladora Vuela vs. Clean Energy Fuels |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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