Correlation Between Harmony Gold and United Rentals
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and United Rentals 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 United Rentals 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 United Rentals, you can compare the effects of market volatilities on Harmony Gold and United Rentals 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 United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and United Rentals.
Diversification Opportunities for Harmony Gold and United Rentals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and United is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals 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 United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of Harmony Gold i.e., Harmony Gold and United Rentals go up and down completely randomly.
Pair Corralation between Harmony Gold and United Rentals
Assuming the 90 days horizon Harmony Gold is expected to generate 2.87 times less return on investment than United Rentals. In addition to that, Harmony Gold is 1.4 times more volatile than United Rentals. It trades about 0.02 of its total potential returns per unit of risk. United Rentals is currently generating about 0.1 per unit of volatility. If you would invest 61,198 in United Rentals on September 1, 2024 and sell it today you would earn a total of 20,702 from holding United Rentals or generate 33.83% 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. United Rentals
Performance |
| Timeline |
| Harmony Gold Mining |
| United Rentals |
Harmony Gold and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and United Rentals
The main advantage of trading using opposite Harmony Gold and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
| United Rentals vs. MAGNUM MINING EXP | United Rentals vs. Tencent Music Entertainment | United Rentals vs. SYSTEMAIR AB | United Rentals vs. ALTAIR RES INC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |