Correlation Between Harmony Gold and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide, you can compare the effects of market volatilities on Harmony Gold and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Kronos Worldwide.
Diversification Opportunities for Harmony Gold and Kronos Worldwide
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and Kronos is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Harmony Gold i.e., Harmony Gold and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Harmony Gold and Kronos Worldwide
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.23 times more return on investment than Kronos Worldwide. However, Harmony Gold is 1.23 times more volatile than Kronos Worldwide. It trades about 0.07 of its potential returns per unit of risk. Kronos Worldwide is currently generating about 0.03 per unit of risk. If you would invest 318.00 in Harmony Gold Mining on September 2, 2024 and sell it today you would earn a total of 532.00 from holding Harmony Gold Mining or generate 167.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Kronos Worldwide
Performance |
| Timeline |
| Harmony Gold Mining |
| Kronos Worldwide |
Harmony Gold and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Kronos Worldwide
The main advantage of trading using opposite Harmony Gold and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide'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 |
| Kronos Worldwide vs. Pembina Pipeline Corp | Kronos Worldwide vs. Perseus Mining Limited | Kronos Worldwide vs. Western Copper and | Kronos Worldwide vs. Goodyear Tire Rubber |
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 Stocks Directory module to find actively traded stocks across global markets.
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