Correlation Between Harmony Gold and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and GOODYEAR T 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 GOODYEAR T 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 GOODYEAR T RUBBER, you can compare the effects of market volatilities on Harmony Gold and GOODYEAR T 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 GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and GOODYEAR T.
Diversification Opportunities for Harmony Gold and GOODYEAR T
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and GOODYEAR is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER 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 GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of Harmony Gold i.e., Harmony Gold and GOODYEAR T go up and down completely randomly.
Pair Corralation between Harmony Gold and GOODYEAR T
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.06 times more return on investment than GOODYEAR T. However, Harmony Gold is 1.06 times more volatile than GOODYEAR T RUBBER. It trades about 0.05 of its potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about -0.23 per unit of risk. If you would invest 850.00 in Harmony Gold Mining on October 14, 2024 and sell it today you would earn a total of 15.00 from holding Harmony Gold Mining or generate 1.76% 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. GOODYEAR T RUBBER
Performance |
| Timeline |
| Harmony Gold Mining |
| GOODYEAR T RUBBER |
Harmony Gold and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and GOODYEAR T
The main advantage of trading using opposite Harmony Gold and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| Harmony Gold vs. RETAIL FOOD GROUP | Harmony Gold vs. FRACTAL GAMING GROUP | Harmony Gold vs. Hochschild Mining plc | Harmony Gold vs. Scientific Games |
| GOODYEAR T vs. De Grey Mining | GOODYEAR T vs. Harmony Gold Mining | GOODYEAR T vs. GREENX METALS LTD | GOODYEAR T vs. RYU Apparel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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