Correlation Between Harmony Gold and News
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and News 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 News 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 News Corporation, you can compare the effects of market volatilities on Harmony Gold and News 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 News. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and News.
Diversification Opportunities for Harmony Gold and News
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harmony and News is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of Harmony Gold i.e., Harmony Gold and News go up and down completely randomly.
Pair Corralation between Harmony Gold and News
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.58 times more return on investment than News. However, Harmony Gold is 2.58 times more volatile than News Corporation. It trades about 0.4 of its potential returns per unit of risk. News Corporation is currently generating about -0.15 per unit of risk. If you would invest 780.00 in Harmony Gold Mining on October 22, 2024 and sell it today you would earn a total of 155.00 from holding Harmony Gold Mining or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Harmony Gold Mining vs. News Corp.
Performance |
| Timeline |
| Harmony Gold Mining |
| News |
Harmony Gold and News Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and News
The main advantage of trading using opposite Harmony Gold and News positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, News 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 News will offset losses from the drop in News' long position.| Harmony Gold vs. DISTRICT METALS | Harmony Gold vs. X FAB Silicon Foundries | Harmony Gold vs. Easy Software AG | Harmony Gold vs. Forsys Metals Corp |
| News vs. BII Railway Transportation | News vs. BROADWIND ENRGY | News vs. EVS Broadcast Equipment | News vs. Ameriprise Financial |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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