Correlation Between Harmony Gold and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and COSTCO WHOLESALE 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 COSTCO WHOLESALE 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 COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Harmony Gold and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and COSTCO WHOLESALE.
Diversification Opportunities for Harmony Gold and COSTCO WHOLESALE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and COSTCO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Harmony Gold i.e., Harmony Gold and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Harmony Gold and COSTCO WHOLESALE
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.01 times more return on investment than COSTCO WHOLESALE. However, Harmony Gold is 2.01 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.07 of its potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.07 per unit of risk. If you would invest 605.00 in Harmony Gold Mining on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Harmony Gold Mining or generate 39.67% 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. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Harmony Gold Mining |
| COSTCO WHOLESALE CDR |
Harmony Gold and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and COSTCO WHOLESALE
The main advantage of trading using opposite Harmony Gold and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE'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 |
| COSTCO WHOLESALE vs. Air Lease | COSTCO WHOLESALE vs. XLMedia PLC | COSTCO WHOLESALE vs. Hollywood Bowl Group | COSTCO WHOLESALE vs. Beijing Media |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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