Correlation Between Harmony Gold and CA Sales
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and CA Sales 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 CA Sales 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 CA Sales Holdings, you can compare the effects of market volatilities on Harmony Gold and CA Sales 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 CA Sales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and CA Sales.
Diversification Opportunities for Harmony Gold and CA Sales
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and CAA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and CA Sales Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Sales Holdings 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 CA Sales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Sales Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and CA Sales go up and down completely randomly.
Pair Corralation between Harmony Gold and CA Sales
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.76 times more return on investment than CA Sales. However, Harmony Gold Mining is 1.32 times less risky than CA Sales. It trades about 0.42 of its potential returns per unit of risk. CA Sales Holdings is currently generating about -0.11 per unit of risk. If you would invest 1,540,700 in Harmony Gold Mining on October 22, 2024 and sell it today you would earn a total of 302,300 from holding Harmony Gold Mining or generate 19.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. CA Sales Holdings
Performance |
| Timeline |
| Harmony Gold Mining |
| CA Sales Holdings |
Harmony Gold and CA Sales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and CA Sales
The main advantage of trading using opposite Harmony Gold and CA Sales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, CA Sales 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 CA Sales will offset losses from the drop in CA Sales' long position.| Harmony Gold vs. Life Healthcare | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. RCL Foods | Harmony Gold vs. Deneb Investments |
| CA Sales vs. Life Healthcare | CA Sales vs. Astral Foods | CA Sales vs. Harmony Gold Mining | CA Sales vs. Ascendis Health |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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