Correlation Between Hosken Consolidated and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Harmony Gold 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 Hosken Consolidated and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hosken Consolidated Investments and Harmony Gold Mining, you can compare the effects of market volatilities on Hosken Consolidated and Harmony Gold 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 Hosken Consolidated with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Harmony Gold.
Diversification Opportunities for Hosken Consolidated and Harmony Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hosken and Harmony is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and Hosken Consolidated 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 Hosken Consolidated Investments are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Harmony Gold go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Harmony Gold
Assuming the 90 days trading horizon Hosken Consolidated Investments is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Hosken Consolidated Investments is 1.43 times less risky than Harmony Gold. The stock trades about -0.26 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest 1,603,500 in Harmony Gold Mining on November 2, 2024 and sell it today you would earn a total of 480,500 from holding Harmony Gold Mining or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Harmony Gold Mining
Performance |
| Timeline |
| Hosken Consolidated |
| Harmony Gold Mining |
Hosken Consolidated and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Harmony Gold
The main advantage of trading using opposite Hosken Consolidated and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Hosken Consolidated vs. Bidvest Group | Hosken Consolidated vs. Kap Industrial Holdings | Hosken Consolidated vs. Deneb Investments | Hosken Consolidated vs. Brikor |
| Harmony Gold vs. RCL Foods | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. Copper 360 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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