Correlation Between Harmony Gold and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sunny Optical 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 Sunny Optical 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 Sunny Optical Technology, you can compare the effects of market volatilities on Harmony Gold and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sunny Optical.
Diversification Opportunities for Harmony Gold and Sunny Optical
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Sunny is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sunny Optical go up and down completely randomly.
Pair Corralation between Harmony Gold and Sunny Optical
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.64 times more return on investment than Sunny Optical. However, Harmony Gold Mining is 1.57 times less risky than Sunny Optical. It trades about 0.6 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.1 per unit of risk. If you would invest 805.00 in Harmony Gold Mining on November 4, 2024 and sell it today you would earn a total of 265.00 from holding Harmony Gold Mining or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Sunny Optical Technology
Performance |
| Timeline |
| Harmony Gold Mining |
| Sunny Optical Technology |
Harmony Gold and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sunny Optical
The main advantage of trading using opposite Harmony Gold and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Harmony Gold vs. TITAN MACHINERY | Harmony Gold vs. Dairy Farm International | Harmony Gold vs. AOYAMA TRADING | Harmony Gold vs. SEI INVESTMENTS |
| Sunny Optical vs. Air New Zealand | Sunny Optical vs. Melco Resorts Entertainment | Sunny Optical vs. JAPAN TOBACCO UNSPADR12 | Sunny Optical vs. FORWARD AIR P |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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