Correlation Between HUTCHMED DRC and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both HUTCHMED DRC 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 HUTCHMED DRC and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHMED DRC and Harmony Gold Mining, you can compare the effects of market volatilities on HUTCHMED DRC 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 HUTCHMED DRC with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and Harmony Gold.
Diversification Opportunities for HUTCHMED DRC and Harmony Gold
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HUTCHMED and Harmony is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC 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 HUTCHMED DRC 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 HUTCHMED DRC 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 HUTCHMED DRC i.e., HUTCHMED DRC and Harmony Gold go up and down completely randomly.
Pair Corralation between HUTCHMED DRC and Harmony Gold
Considering the 90-day investment horizon HUTCHMED DRC is expected to generate 2.67 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, HUTCHMED DRC is 1.21 times less risky than Harmony Gold. It trades about 0.04 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 475.00 from holding Harmony Gold Mining or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 54.16% |
| Values | Daily Returns |
HUTCHMED DRC vs. Harmony Gold Mining
Performance |
| Timeline |
| HUTCHMED DRC |
| Harmony Gold Mining |
HUTCHMED DRC and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHMED DRC and Harmony Gold
The main advantage of trading using opposite HUTCHMED DRC and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHMED DRC 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.| HUTCHMED DRC vs. ANI Pharmaceuticals | HUTCHMED DRC vs. Phibro Animal Health | HUTCHMED DRC vs. Prestige Brand Holdings | HUTCHMED DRC vs. Pacira BioSciences, |
| Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp | Harmony Gold vs. HUMANA INC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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