Correlation Between Harmony Gold and Wilson Bayly
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Wilson Bayly 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 Wilson Bayly 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 Wilson Bayly Holmes, you can compare the effects of market volatilities on Harmony Gold and Wilson Bayly 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 Wilson Bayly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Wilson Bayly.
Diversification Opportunities for Harmony Gold and Wilson Bayly
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Wilson is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Wilson Bayly Holmes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilson Bayly Holmes 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 Wilson Bayly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilson Bayly Holmes has no effect on the direction of Harmony Gold i.e., Harmony Gold and Wilson Bayly go up and down completely randomly.
Pair Corralation between Harmony Gold and Wilson Bayly
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.17 times more return on investment than Wilson Bayly. However, Harmony Gold is 1.17 times more volatile than Wilson Bayly Holmes. It trades about 0.16 of its potential returns per unit of risk. Wilson Bayly Holmes is currently generating about -0.16 per unit of risk. If you would invest 1,523,700 in Harmony Gold Mining on November 30, 2024 and sell it today you would earn a total of 278,600 from holding Harmony Gold Mining or generate 18.28% 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. Wilson Bayly Holmes
Performance |
| Timeline |
| Harmony Gold Mining |
| Wilson Bayly Holmes |
Harmony Gold and Wilson Bayly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Wilson Bayly
The main advantage of trading using opposite Harmony Gold and Wilson Bayly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Wilson Bayly 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 Wilson Bayly will offset losses from the drop in Wilson Bayly's long position.| Harmony Gold vs. Frontier Transport Holdings | Harmony Gold vs. Life Healthcare | Harmony Gold vs. Zeder Investments | Harmony Gold vs. RCL Foods |
| Wilson Bayly vs. Safari Investments RSA | Wilson Bayly vs. MC Mining | Wilson Bayly vs. HomeChoice Investments | Wilson Bayly vs. Astoria Investments |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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