Correlation Between Harmony Gold and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Holdings, you can compare the effects of market volatilities on Harmony Gold and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and COSCO SHIPPING.
Diversification Opportunities for Harmony Gold and COSCO SHIPPING
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and COSCO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and COSCO SHIPPING Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Holdings 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Harmony Gold and COSCO SHIPPING
Assuming the 90 days horizon Harmony Gold is expected to generate 1.07 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Harmony Gold Mining is 1.25 times less risky than COSCO SHIPPING. It trades about 0.07 of its potential returns per unit of risk. COSCO SHIPPING Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 50.00 in COSCO SHIPPING Holdings on September 3, 2024 and sell it today you would earn a total of 80.00 from holding COSCO SHIPPING Holdings or generate 160.0% 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. COSCO SHIPPING Holdings
Performance |
| Timeline |
| Harmony Gold Mining |
| COSCO SHIPPING Holdings |
Harmony Gold and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and COSCO SHIPPING
The main advantage of trading using opposite Harmony Gold and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING'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 |
| COSCO SHIPPING vs. CN MODERN DAIRY | COSCO SHIPPING vs. Performance Food Group | COSCO SHIPPING vs. Hemisphere Energy Corp | COSCO SHIPPING vs. SK TELECOM TDADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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