Correlation Between Harmony Gold and VIETNAM ENTERPRISE
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE INV, you can compare the effects of market volatilities on Harmony Gold and VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and VIETNAM ENTERPRISE.
Diversification Opportunities for Harmony Gold and VIETNAM ENTERPRISE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and VIETNAM is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and VIETNAM ENTERPRISE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIETNAM ENTERPRISE INV 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 VIETNAM ENTERPRISE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIETNAM ENTERPRISE INV has no effect on the direction of Harmony Gold i.e., Harmony Gold and VIETNAM ENTERPRISE go up and down completely randomly.
Pair Corralation between Harmony Gold and VIETNAM ENTERPRISE
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.44 times more return on investment than VIETNAM ENTERPRISE. However, Harmony Gold is 2.44 times more volatile than VIETNAM ENTERPRISE INV. It trades about 0.1 of its potential returns per unit of risk. VIETNAM ENTERPRISE INV is currently generating about 0.02 per unit of risk. If you would invest 270.00 in Harmony Gold Mining on November 27, 2024 and sell it today you would earn a total of 760.00 from holding Harmony Gold Mining or generate 281.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Harmony Gold Mining vs. VIETNAM ENTERPRISE INV
Performance |
| Timeline |
| Harmony Gold Mining |
| VIETNAM ENTERPRISE INV |
Harmony Gold and VIETNAM ENTERPRISE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and VIETNAM ENTERPRISE
The main advantage of trading using opposite Harmony Gold and VIETNAM ENTERPRISE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, VIETNAM ENTERPRISE 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 VIETNAM ENTERPRISE will offset losses from the drop in VIETNAM ENTERPRISE's long position.| Harmony Gold vs. AEON METALS LTD | Harmony Gold vs. Jacquet Metal Service | Harmony Gold vs. Stag Industrial | Harmony Gold vs. SIERRA METALS |
| VIETNAM ENTERPRISE vs. MOLSON RS BEVERAGE | VIETNAM ENTERPRISE vs. Mitsui Chemicals | VIETNAM ENTERPRISE vs. Boston Beer Co | VIETNAM ENTERPRISE vs. Fevertree Drinks 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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