Correlation Between Harmony Gold and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and REINET INVESTMENTS 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 REINET INVESTMENTS 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 REINET INVESTMENTS SCA, you can compare the effects of market volatilities on Harmony Gold and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and REINET INVESTMENTS.
Diversification Opportunities for Harmony Gold and REINET INVESTMENTS
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and REINET is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of Harmony Gold i.e., Harmony Gold and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between Harmony Gold and REINET INVESTMENTS
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.35 times more return on investment than REINET INVESTMENTS. However, Harmony Gold is 1.35 times more volatile than REINET INVESTMENTS SCA. It trades about 0.05 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.04 per unit of risk. If you would invest 810.00 in Harmony Gold Mining on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Harmony Gold Mining or generate 14.81% 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. REINET INVESTMENTS SCA
Performance |
| Timeline |
| Harmony Gold Mining |
| REINET INVESTMENTS SCA |
Harmony Gold and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and REINET INVESTMENTS
The main advantage of trading using opposite Harmony Gold and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Agnico Eagle Mines | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| REINET INVESTMENTS vs. Align Technology | REINET INVESTMENTS vs. Check Point Software | REINET INVESTMENTS vs. AUTO TRADER ADR | REINET INVESTMENTS vs. National Retail Properties |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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