Correlation Between Harmony Gold and LANDSEA HOMES
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and LANDSEA HOMES 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 LANDSEA HOMES 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 LANDSEA HOMES P, you can compare the effects of market volatilities on Harmony Gold and LANDSEA HOMES 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 LANDSEA HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and LANDSEA HOMES.
Diversification Opportunities for Harmony Gold and LANDSEA HOMES
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and LANDSEA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of Harmony Gold i.e., Harmony Gold and LANDSEA HOMES go up and down completely randomly.
Pair Corralation between Harmony Gold and LANDSEA HOMES
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.01 times more return on investment than LANDSEA HOMES. However, Harmony Gold is 1.01 times more volatile than LANDSEA HOMES P. It trades about 0.08 of its potential returns per unit of risk. LANDSEA HOMES P is currently generating about 0.02 per unit of risk. If you would invest 342.00 in Harmony Gold Mining on December 4, 2024 and sell it today you would earn a total of 568.00 from holding Harmony Gold Mining or generate 166.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Harmony Gold Mining vs. LANDSEA HOMES P
Performance |
| Timeline |
| Harmony Gold Mining |
| LANDSEA HOMES P |
Harmony Gold and LANDSEA HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and LANDSEA HOMES
The main advantage of trading using opposite Harmony Gold and LANDSEA HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, LANDSEA HOMES 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 LANDSEA HOMES will offset losses from the drop in LANDSEA HOMES's long position.| Harmony Gold vs. Canadian Utilities Limited | Harmony Gold vs. INTERSHOP Communications Aktiengesellschaft | Harmony Gold vs. Chengdu PUTIAN Telecommunications | Harmony Gold vs. NORTHEAST UTILITIES |
| LANDSEA HOMES vs. Magic Software Enterprises | LANDSEA HOMES vs. Constellation Software | LANDSEA HOMES vs. Alfa Financial Software | LANDSEA HOMES vs. Take Two Interactive Software |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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