Correlation Between Harmony Gold and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Teradata Corp 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 Teradata Corp 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 Teradata Corp, you can compare the effects of market volatilities on Harmony Gold and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Teradata Corp.
Diversification Opportunities for Harmony Gold and Teradata Corp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Teradata is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Teradata Corp go up and down completely randomly.
Pair Corralation between Harmony Gold and Teradata Corp
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.86 times more return on investment than Teradata Corp. However, Harmony Gold is 1.86 times more volatile than Teradata Corp. It trades about 0.24 of its potential returns per unit of risk. Teradata Corp is currently generating about 0.08 per unit of risk. If you would invest 845.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 225.00 from holding Harmony Gold Mining or generate 26.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Teradata Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| Teradata Corp |
Harmony Gold and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Teradata Corp
The main advantage of trading using opposite Harmony Gold and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| Harmony Gold vs. ePlay Digital | Harmony Gold vs. InPlay Oil Corp | Harmony Gold vs. Sun Life Financial | Harmony Gold vs. Chiba Bank |
| Teradata Corp vs. SEKISUI CHEMICAL | Teradata Corp vs. TIANDE CHEMICAL | Teradata Corp vs. FORWARD AIR P | Teradata Corp vs. Westinghouse Air Brake |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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