Correlation Between Harmony Gold and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Ramsay Health 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 Ramsay Health 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 Ramsay Health Care, you can compare the effects of market volatilities on Harmony Gold and Ramsay Health 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 Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Ramsay Health.
Diversification Opportunities for Harmony Gold and Ramsay Health
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Ramsay is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care 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 Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of Harmony Gold i.e., Harmony Gold and Ramsay Health go up and down completely randomly.
Pair Corralation between Harmony Gold and Ramsay Health
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.19 times more return on investment than Ramsay Health. However, Harmony Gold is 2.19 times more volatile than Ramsay Health Care. It trades about 0.07 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.04 per unit of risk. If you would invest 541.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 309.00 from holding Harmony Gold Mining or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Ramsay Health Care
Performance |
| Timeline |
| Harmony Gold Mining |
| Ramsay Health Care |
Harmony Gold and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Ramsay Health
The main advantage of trading using opposite Harmony Gold and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Ramsay Health 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 Ramsay Health will offset losses from the drop in Ramsay Health's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. NMI Holdings | Ramsay Health vs. Origin Agritech | Ramsay Health vs. SIVERS SEMICONDUCTORS AB |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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