Correlation Between Harmony Gold and TERADATA
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and TERADATA 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 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, you can compare the effects of market volatilities on Harmony Gold and TERADATA 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and TERADATA.
Diversification Opportunities for Harmony Gold and TERADATA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and TERADATA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Harmony Gold i.e., Harmony Gold and TERADATA go up and down completely randomly.
Pair Corralation between Harmony Gold and TERADATA
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 3.07 times more return on investment than TERADATA. However, Harmony Gold is 3.07 times more volatile than TERADATA. It trades about 0.16 of its potential returns per unit of risk. TERADATA is currently generating about 0.11 per unit of risk. If you would invest 855.00 in Harmony Gold Mining on October 28, 2024 and sell it today you would earn a total of 135.00 from holding Harmony Gold Mining or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. TERADATA
Performance |
| Timeline |
| Harmony Gold Mining |
| TERADATA |
Harmony Gold and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and TERADATA
The main advantage of trading using opposite Harmony Gold and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, TERADATA 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 will offset losses from the drop in TERADATA's long position.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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