Correlation Between Harmony Gold and Zumtobel Group
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Zumtobel Group 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 Zumtobel Group 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 Zumtobel Group AG, you can compare the effects of market volatilities on Harmony Gold and Zumtobel Group 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 Zumtobel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Zumtobel Group.
Diversification Opportunities for Harmony Gold and Zumtobel Group
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Zumtobel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Zumtobel Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumtobel Group AG 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 Zumtobel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumtobel Group AG has no effect on the direction of Harmony Gold i.e., Harmony Gold and Zumtobel Group go up and down completely randomly.
Pair Corralation between Harmony Gold and Zumtobel Group
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Zumtobel Group. In addition to that, Harmony Gold is 2.09 times more volatile than Zumtobel Group AG. It trades about -0.13 of its total potential returns per unit of risk. Zumtobel Group AG is currently generating about -0.13 per unit of volatility. If you would invest 530.00 in Zumtobel Group AG on September 4, 2024 and sell it today you would lose (24.00) from holding Zumtobel Group AG or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Zumtobel Group AG
Performance |
| Timeline |
| Harmony Gold Mining |
| Zumtobel Group AG |
Harmony Gold and Zumtobel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Zumtobel Group
The main advantage of trading using opposite Harmony Gold and Zumtobel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Zumtobel Group 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 Zumtobel Group will offset losses from the drop in Zumtobel Group'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 |
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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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