Correlation Between Harmony Gold and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and UMC Electronics 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 UMC Electronics 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 UMC Electronics Co, you can compare the effects of market volatilities on Harmony Gold and UMC Electronics 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 UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and UMC Electronics.
Diversification Opportunities for Harmony Gold and UMC Electronics
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and UMC is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics 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 UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of Harmony Gold i.e., Harmony Gold and UMC Electronics go up and down completely randomly.
Pair Corralation between Harmony Gold and UMC Electronics
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the UMC Electronics. In addition to that, Harmony Gold is 1.64 times more volatile than UMC Electronics Co. It trades about -0.21 of its total potential returns per unit of risk. UMC Electronics Co is currently generating about -0.2 per unit of volatility. If you would invest 206.00 in UMC Electronics Co on August 31, 2024 and sell it today you would lose (19.00) from holding UMC Electronics Co or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. UMC Electronics Co
Performance |
| Timeline |
| Harmony Gold Mining |
| UMC Electronics |
Harmony Gold and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and UMC Electronics
The main advantage of trading using opposite Harmony Gold and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
| UMC Electronics vs. Murata Manufacturing Co | UMC Electronics vs. Corning Incorporated | UMC Electronics vs. TDK Corporation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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