Correlation Between Harmony Gold and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Penta Ocean 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 Penta Ocean 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 Penta Ocean Construction Co, you can compare the effects of market volatilities on Harmony Gold and Penta Ocean 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 Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Penta Ocean.
Diversification Opportunities for Harmony Gold and Penta Ocean
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Penta is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc 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 Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Penta Ocean go up and down completely randomly.
Pair Corralation between Harmony Gold and Penta Ocean
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.7 times more return on investment than Penta Ocean. However, Harmony Gold is 2.7 times more volatile than Penta Ocean Construction Co. It trades about 0.48 of its potential returns per unit of risk. Penta Ocean Construction Co is currently generating about -0.02 per unit of risk. If you would invest 780.00 in Harmony Gold Mining on October 29, 2024 and sell it today you would earn a total of 210.00 from holding Harmony Gold Mining or generate 26.92% 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. Penta Ocean Construction Co
Performance |
| Timeline |
| Harmony Gold Mining |
| Penta Ocean Construc |
Harmony Gold and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Penta Ocean
The main advantage of trading using opposite Harmony Gold and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Penta Ocean 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 Penta Ocean will offset losses from the drop in Penta Ocean's long position.| Harmony Gold vs. SWISS WATER DECAFFCOFFEE | Harmony Gold vs. alstria office REIT AG | Harmony Gold vs. VITEC SOFTWARE GROUP | Harmony Gold vs. Beta Systems Software |
| Penta Ocean vs. Darden Restaurants | Penta Ocean vs. Chuangs China Investments | Penta Ocean vs. PSI Software AG | Penta Ocean vs. MAGIC SOFTWARE ENTR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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