Correlation Between Harmony Gold and Sabra Health
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sabra 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 Sabra 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 Sabra Health Care, you can compare the effects of market volatilities on Harmony Gold and Sabra 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 Sabra Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sabra Health.
Diversification Opportunities for Harmony Gold and Sabra Health
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Sabra is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sabra Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra 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 Sabra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Health Care has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sabra Health go up and down completely randomly.
Pair Corralation between Harmony Gold and Sabra Health
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Sabra Health. In addition to that, Harmony Gold is 1.57 times more volatile than Sabra Health Care. It trades about -0.11 of its total potential returns per unit of risk. Sabra Health Care is currently generating about 0.04 per unit of volatility. If you would invest 1,723 in Sabra Health Care on August 27, 2024 and sell it today you would earn a total of 22.00 from holding Sabra Health Care or generate 1.28% 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. Sabra Health Care
Performance |
| Timeline |
| Harmony Gold Mining |
| Sabra Health Care |
Harmony Gold and Sabra Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sabra Health
The main advantage of trading using opposite Harmony Gold and Sabra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sabra 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 Sabra Health will offset losses from the drop in Sabra Health'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 |
| Sabra Health vs. Alaska Air Group | Sabra Health vs. Air New Zealand | Sabra Health vs. DIVERSIFIED ROYALTY | Sabra Health vs. SEALED AIR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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