Correlation Between Harmony Gold and CAIRN HOMES
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and CAIRN 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 CAIRN 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 CAIRN HOMES EO, you can compare the effects of market volatilities on Harmony Gold and CAIRN 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 CAIRN HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and CAIRN HOMES.
Diversification Opportunities for Harmony Gold and CAIRN HOMES
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and CAIRN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO 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 CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of Harmony Gold i.e., Harmony Gold and CAIRN HOMES go up and down completely randomly.
Pair Corralation between Harmony Gold and CAIRN HOMES
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.51 times more return on investment than CAIRN HOMES. However, Harmony Gold is 1.51 times more volatile than CAIRN HOMES EO. It trades about 0.08 of its potential returns per unit of risk. CAIRN HOMES EO is currently generating about 0.1 per unit of risk. If you would invest 376.00 in Harmony Gold Mining on October 16, 2024 and sell it today you would earn a total of 504.00 from holding Harmony Gold Mining or generate 134.04% 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. CAIRN HOMES EO
Performance |
| Timeline |
| Harmony Gold Mining |
| CAIRN HOMES EO |
Harmony Gold and CAIRN HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and CAIRN HOMES
The main advantage of trading using opposite Harmony Gold and CAIRN HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, CAIRN 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 CAIRN HOMES will offset losses from the drop in CAIRN HOMES's long position.| Harmony Gold vs. FIRST SAVINGS FINL | Harmony Gold vs. Genco Shipping Trading | Harmony Gold vs. DELTA AIR LINES | Harmony Gold vs. Wizz Air Holdings |
| CAIRN HOMES vs. QINGCI GAMES INC | CAIRN HOMES vs. Harmony Gold Mining | CAIRN HOMES vs. GigaMedia | CAIRN HOMES vs. Calibre Mining Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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