Correlation Between Harmony Gold and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Harmony Gold and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and AIR PRODCHEMICALS.
Diversification Opportunities for Harmony Gold and AIR PRODCHEMICALS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and AIR is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Harmony Gold i.e., Harmony Gold and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Harmony Gold and AIR PRODCHEMICALS
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.07 times more return on investment than AIR PRODCHEMICALS. However, Harmony Gold is 2.07 times more volatile than AIR PRODCHEMICALS. It trades about 0.07 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.02 per unit of risk. If you would invest 319.00 in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of 531.00 from holding Harmony Gold Mining or generate 166.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Harmony Gold Mining |
| AIR PRODCHEMICALS |
Harmony Gold and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and AIR PRODCHEMICALS
The main advantage of trading using opposite Harmony Gold and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS'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 |
| AIR PRODCHEMICALS vs. Tsingtao Brewery | AIR PRODCHEMICALS vs. Broadwind | AIR PRODCHEMICALS vs. National Beverage Corp | AIR PRODCHEMICALS vs. United Breweries Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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