Correlation Between Harmony Gold and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on Harmony Gold and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Dairy Farm.
Diversification Opportunities for Harmony Gold and Dairy Farm
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Dairy is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Harmony Gold i.e., Harmony Gold and Dairy Farm go up and down completely randomly.
Pair Corralation between Harmony Gold and Dairy Farm
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.91 times more return on investment than Dairy Farm. However, Harmony Gold Mining is 1.09 times less risky than Dairy Farm. It trades about 0.48 of its potential returns per unit of risk. Dairy Farm International is currently generating about -0.08 per unit of risk. If you would invest 830.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 240.00 from holding Harmony Gold Mining or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Harmony Gold Mining vs. Dairy Farm International
Performance |
| Timeline |
| Harmony Gold Mining |
| Dairy Farm International |
Harmony Gold and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Dairy Farm
The main advantage of trading using opposite Harmony Gold and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Harmony Gold vs. ePlay Digital | Harmony Gold vs. InPlay Oil Corp | Harmony Gold vs. Sun Life Financial | Harmony Gold vs. Chiba Bank |
| Dairy Farm vs. SEI INVESTMENTS | Dairy Farm vs. CAL MAINE FOODS | Dairy Farm vs. DIVERSIFIED ROYALTY | Dairy Farm vs. Fevertree Drinks PLC |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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