Correlation Between Harmony Gold and Pure Storage
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Pure Storage 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 Pure Storage 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 Pure Storage, you can compare the effects of market volatilities on Harmony Gold and Pure Storage 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 Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Pure Storage.
Diversification Opportunities for Harmony Gold and Pure Storage
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Pure is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage 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 Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Harmony Gold i.e., Harmony Gold and Pure Storage go up and down completely randomly.
Pair Corralation between Harmony Gold and Pure Storage
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.03 times more return on investment than Pure Storage. However, Harmony Gold is 1.03 times more volatile than Pure Storage. It trades about 0.08 of its potential returns per unit of risk. Pure Storage is currently generating about 0.07 per unit of risk. If you would invest 400.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 455.00 from holding Harmony Gold Mining or generate 113.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Pure Storage
Performance |
| Timeline |
| Harmony Gold Mining |
| Pure Storage |
Harmony Gold and Pure Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Pure Storage
The main advantage of trading using opposite Harmony Gold and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage'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 |
| Pure Storage vs. ALBIS LEASING AG | Pure Storage vs. Harmony Gold Mining | Pure Storage vs. Sixt Leasing SE | Pure Storage vs. COPLAND ROAD CAPITAL |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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