Correlation Between Harmony Gold and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT, you can compare the effects of market volatilities on Harmony Gold and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and CDL INVESTMENT.
Diversification Opportunities for Harmony Gold and CDL INVESTMENT
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and CDL is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of Harmony Gold i.e., Harmony Gold and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between Harmony Gold and CDL INVESTMENT
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.25 times more return on investment than CDL INVESTMENT. However, Harmony Gold is 1.25 times more volatile than CDL INVESTMENT. It trades about 0.45 of its potential returns per unit of risk. CDL INVESTMENT is currently generating about -0.04 per unit of risk. If you would invest 830.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 240.00 from holding Harmony Gold Mining or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. CDL INVESTMENT
Performance |
| Timeline |
| Harmony Gold Mining |
| CDL INVESTMENT |
Harmony Gold and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and CDL INVESTMENT
The main advantage of trading using opposite Harmony Gold and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.| Harmony Gold vs. ePlay Digital | Harmony Gold vs. InPlay Oil Corp | Harmony Gold vs. Sun Life Financial | Harmony Gold vs. Chiba Bank |
| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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