Correlation Between Harmony Gold and ECHO INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and ECHO INVESTMENT 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 ECHO INVESTMENT 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 ECHO INVESTMENT ZY, you can compare the effects of market volatilities on Harmony Gold and ECHO INVESTMENT 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 ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and ECHO INVESTMENT.
Diversification Opportunities for Harmony Gold and ECHO INVESTMENT
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and ECHO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY 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 ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of Harmony Gold i.e., Harmony Gold and ECHO INVESTMENT go up and down completely randomly.
Pair Corralation between Harmony Gold and ECHO INVESTMENT
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.15 times more return on investment than ECHO INVESTMENT. However, Harmony Gold is 2.15 times more volatile than ECHO INVESTMENT ZY. It trades about -0.05 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about -0.12 per unit of risk. If you would invest 895.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would lose (40.00) from holding Harmony Gold Mining or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. ECHO INVESTMENT ZY
Performance |
| Timeline |
| Harmony Gold Mining |
| ECHO INVESTMENT ZY |
Harmony Gold and ECHO INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and ECHO INVESTMENT
The main advantage of trading using opposite Harmony Gold and ECHO INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, ECHO INVESTMENT 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 ECHO INVESTMENT will offset losses from the drop in ECHO INVESTMENT's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
| ECHO INVESTMENT vs. OPEN HOUSE GROUP | ECHO INVESTMENT vs. Superior Plus Corp | ECHO INVESTMENT vs. SIVERS SEMICONDUCTORS AB | ECHO INVESTMENT vs. CHINA HUARONG ENERHD 50 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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