Correlation Between Harmony Gold and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Harmony Gold and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Chengdu PUTIAN.
Diversification Opportunities for Harmony Gold and Chengdu PUTIAN
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and Chengdu is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Harmony Gold i.e., Harmony Gold and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Harmony Gold and Chengdu PUTIAN
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.75 times more return on investment than Chengdu PUTIAN. However, Harmony Gold Mining is 1.32 times less risky than Chengdu PUTIAN. It trades about 0.7 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.09 per unit of risk. If you would invest 795.00 in Harmony Gold Mining on November 7, 2024 and sell it today you would earn a total of 305.00 from holding Harmony Gold Mining or generate 38.36% 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. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Harmony Gold Mining |
| Chengdu PUTIAN Telec |
Harmony Gold and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Chengdu PUTIAN
The main advantage of trading using opposite Harmony Gold and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| Harmony Gold vs. X FAB Silicon Foundries | Harmony Gold vs. SWISS WATER DECAFFCOFFEE | Harmony Gold vs. China Resources Beer | Harmony Gold vs. The Boston Beer |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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