Correlation Between Harmony Gold and VITEC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and VITEC SOFTWARE 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 VITEC SOFTWARE 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 VITEC SOFTWARE GROUP, you can compare the effects of market volatilities on Harmony Gold and VITEC SOFTWARE 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 VITEC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and VITEC SOFTWARE.
Diversification Opportunities for Harmony Gold and VITEC SOFTWARE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and VITEC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and VITEC SOFTWARE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITEC SOFTWARE GROUP 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 VITEC SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITEC SOFTWARE GROUP has no effect on the direction of Harmony Gold i.e., Harmony Gold and VITEC SOFTWARE go up and down completely randomly.
Pair Corralation between Harmony Gold and VITEC SOFTWARE
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.63 times more return on investment than VITEC SOFTWARE. However, Harmony Gold is 1.63 times more volatile than VITEC SOFTWARE GROUP. It trades about 0.07 of its potential returns per unit of risk. VITEC SOFTWARE GROUP is currently generating about 0.01 per unit of risk. If you would invest 541.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 309.00 from holding Harmony Gold Mining or generate 57.12% 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. VITEC SOFTWARE GROUP
Performance |
| Timeline |
| Harmony Gold Mining |
| VITEC SOFTWARE GROUP |
Harmony Gold and VITEC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and VITEC SOFTWARE
The main advantage of trading using opposite Harmony Gold and VITEC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, VITEC SOFTWARE 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 VITEC SOFTWARE will offset losses from the drop in VITEC SOFTWARE's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc | VITEC SOFTWARE vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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