Correlation Between Harmony Gold and Canon Marketing
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Canon Marketing 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 Canon Marketing 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 Canon Marketing Japan, you can compare the effects of market volatilities on Harmony Gold and Canon Marketing 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 Canon Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Canon Marketing.
Diversification Opportunities for Harmony Gold and Canon Marketing
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harmony and Canon is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Canon Marketing Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Marketing Japan 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 Canon Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Marketing Japan has no effect on the direction of Harmony Gold i.e., Harmony Gold and Canon Marketing go up and down completely randomly.
Pair Corralation between Harmony Gold and Canon Marketing
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.14 times more return on investment than Canon Marketing. However, Harmony Gold is 2.14 times more volatile than Canon Marketing Japan. It trades about 0.04 of its potential returns per unit of risk. Canon Marketing Japan is currently generating about 0.03 per unit of risk. If you would invest 805.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Harmony Gold Mining or generate 6.21% 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. Canon Marketing Japan
Performance |
| Timeline |
| Harmony Gold Mining |
| Canon Marketing Japan |
Harmony Gold and Canon Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Canon Marketing
The main advantage of trading using opposite Harmony Gold and Canon Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Canon Marketing 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 Canon Marketing will offset losses from the drop in Canon Marketing's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
| Canon Marketing vs. Canon Inc | Canon Marketing vs. Canon Inc | Canon Marketing vs. Ricoh Company | Canon Marketing vs. Brother Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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