Correlation Between Harmony Gold and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on Harmony Gold and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and CarsalesCom.
Diversification Opportunities for Harmony Gold and CarsalesCom
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and CarsalesCom is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Harmony Gold i.e., Harmony Gold and CarsalesCom go up and down completely randomly.
Pair Corralation between Harmony Gold and CarsalesCom
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.11 times more return on investment than CarsalesCom. However, Harmony Gold is 2.11 times more volatile than CarsalesCom. It trades about 0.1 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.1 per unit of risk. If you would invest 372.00 in Harmony Gold Mining on August 29, 2024 and sell it today you would earn a total of 488.00 from holding Harmony Gold Mining or generate 131.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. CarsalesCom
Performance |
| Timeline |
| Harmony Gold Mining |
| CarsalesCom |
Harmony Gold and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and CarsalesCom
The main advantage of trading using opposite Harmony Gold and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| CarsalesCom vs. AM EAGLE OUTFITTERS | CarsalesCom vs. RYU Apparel | CarsalesCom vs. Cal Maine Foods | CarsalesCom vs. SCIENCE IN SPORT |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |