Correlation Between Harmony Gold and GUDANG GARAM
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and GUDANG GARAM 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 GUDANG GARAM 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 GUDANG GARAM, you can compare the effects of market volatilities on Harmony Gold and GUDANG GARAM 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 GUDANG GARAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and GUDANG GARAM.
Diversification Opportunities for Harmony Gold and GUDANG GARAM
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and GUDANG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and GUDANG GARAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUDANG GARAM 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 GUDANG GARAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUDANG GARAM has no effect on the direction of Harmony Gold i.e., Harmony Gold and GUDANG GARAM go up and down completely randomly.
Pair Corralation between Harmony Gold and GUDANG GARAM
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.45 times more return on investment than GUDANG GARAM. However, Harmony Gold is 1.45 times more volatile than GUDANG GARAM. It trades about 0.07 of its potential returns per unit of risk. GUDANG GARAM is currently generating about -0.02 per unit of risk. If you would invest 319.00 in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of 531.00 from holding Harmony Gold Mining or generate 166.46% 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. GUDANG GARAM
Performance |
| Timeline |
| Harmony Gold Mining |
| GUDANG GARAM |
Harmony Gold and GUDANG GARAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and GUDANG GARAM
The main advantage of trading using opposite Harmony Gold and GUDANG GARAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, GUDANG GARAM 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 GUDANG GARAM will offset losses from the drop in GUDANG GARAM's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| GUDANG GARAM vs. Thai Beverage Public | GUDANG GARAM vs. Cal Maine Foods | GUDANG GARAM vs. Harmony Gold Mining | GUDANG GARAM vs. GALENA MINING LTD |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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