Correlation Between Harmony Gold and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on Harmony Gold and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Infrastrutture Wireless.
Diversification Opportunities for Harmony Gold and Infrastrutture Wireless
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Infrastrutture is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of Harmony Gold i.e., Harmony Gold and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between Harmony Gold and Infrastrutture Wireless
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 3.13 times more return on investment than Infrastrutture Wireless. However, Harmony Gold is 3.13 times more volatile than Infrastrutture Wireless Italiane. It trades about 0.05 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about 0.02 per unit of risk. If you would invest 753.00 in Harmony Gold Mining on October 25, 2024 and sell it today you would earn a total of 202.00 from holding Harmony Gold Mining or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| Harmony Gold Mining |
| Infrastrutture Wireless |
Harmony Gold and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Infrastrutture Wireless
The main advantage of trading using opposite Harmony Gold and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| Harmony Gold vs. Nippon Light Metal | Harmony Gold vs. Stag Industrial | Harmony Gold vs. Forsys Metals Corp | Harmony Gold vs. Jacquet Metal Service |
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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