Correlation Between Harmony Gold and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on Harmony Gold and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and THRACE PLASTICS.
Diversification Opportunities for Harmony Gold and THRACE PLASTICS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and THRACE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Harmony Gold i.e., Harmony Gold and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Harmony Gold and THRACE PLASTICS
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.82 times more return on investment than THRACE PLASTICS. However, Harmony Gold is 1.82 times more volatile than THRACE PLASTICS. It trades about 0.19 of its potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.01 per unit of risk. If you would invest 780.00 in Harmony Gold Mining on November 30, 2024 and sell it today you would earn a total of 190.00 from holding Harmony Gold Mining or generate 24.36% 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. THRACE PLASTICS
Performance |
| Timeline |
| Harmony Gold Mining |
| THRACE PLASTICS |
Harmony Gold and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and THRACE PLASTICS
The main advantage of trading using opposite Harmony Gold and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Harmony Gold vs. UET United Electronic | Harmony Gold vs. STORE ELECTRONIC | Harmony Gold vs. INTERCONT HOTELS | Harmony Gold vs. NH HOTEL GROUP |
| THRACE PLASTICS vs. Allegheny Technologies Incorporated | THRACE PLASTICS vs. Applied Materials | THRACE PLASTICS vs. Agilent Technologies | THRACE PLASTICS vs. Playtech plc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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