Correlation Between Harmony Gold and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on Harmony Gold and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Hisense Home.
Diversification Opportunities for Harmony Gold and Hisense Home
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Hisense is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Harmony Gold i.e., Harmony Gold and Hisense Home go up and down completely randomly.
Pair Corralation between Harmony Gold and Hisense Home
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.93 times more return on investment than Hisense Home. However, Harmony Gold Mining is 1.07 times less risky than Hisense Home. It trades about 0.48 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.22 per unit of risk. If you would invest 770.00 in Harmony Gold Mining on October 25, 2024 and sell it today you would earn a total of 185.00 from holding Harmony Gold Mining or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Hisense Home Appliances
Performance |
| Timeline |
| Harmony Gold Mining |
| Hisense Home Appliances |
Harmony Gold and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Hisense Home
The main advantage of trading using opposite Harmony Gold and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Harmony Gold vs. Nippon Light Metal | Harmony Gold vs. Stag Industrial | Harmony Gold vs. Forsys Metals Corp | Harmony Gold vs. Jacquet Metal Service |
| Hisense Home vs. CHRYSALIS INVESTMENTS LTD | Hisense Home vs. AOYAMA TRADING | Hisense Home vs. Harmony Gold Mining | Hisense Home vs. Globex Mining Enterprises |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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