Correlation Between Harmony Gold and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Harmony Gold and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and PARKEN Sport.
Diversification Opportunities for Harmony Gold and PARKEN Sport
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and PARKEN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Harmony Gold i.e., Harmony Gold and PARKEN Sport go up and down completely randomly.
Pair Corralation between Harmony Gold and PARKEN Sport
Assuming the 90 days horizon Harmony Gold is expected to generate 1.47 times less return on investment than PARKEN Sport. But when comparing it to its historical volatility, Harmony Gold Mining is 1.82 times less risky than PARKEN Sport. It trades about 0.08 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 433.00 in PARKEN Sport Entertainment on September 1, 2024 and sell it today you would earn a total of 1,172 from holding PARKEN Sport Entertainment or generate 270.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Harmony Gold Mining |
| PARKEN Sport Enterta |
Harmony Gold and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and PARKEN Sport
The main advantage of trading using opposite Harmony Gold and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport'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 |
| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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