Correlation Between Harmony Gold and Air Transport
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Air Transport 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 Transport 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 Transport Services, you can compare the effects of market volatilities on Harmony Gold and Air Transport 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 Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Air Transport.
Diversification Opportunities for Harmony Gold and Air Transport
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Air is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Harmony Gold i.e., Harmony Gold and Air Transport go up and down completely randomly.
Pair Corralation between Harmony Gold and Air Transport
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.14 times more return on investment than Air Transport. However, Harmony Gold is 1.14 times more volatile than Air Transport Services. It trades about 0.07 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.03 per unit of risk. If you would invest 417.00 in Harmony Gold Mining on August 31, 2024 and sell it today you would earn a total of 428.00 from holding Harmony Gold Mining or generate 102.64% 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. Air Transport Services
Performance |
| Timeline |
| Harmony Gold Mining |
| Air Transport Services |
Harmony Gold and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Air Transport
The main advantage of trading using opposite Harmony Gold and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Air Transport 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 Transport will offset losses from the drop in Air Transport's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
| Air Transport vs. AENA SME UNSPADR110 | Air Transport vs. Superior Plus Corp | Air Transport vs. NMI Holdings | Air Transport vs. Origin Agritech |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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