Correlation Between Hudson Technologies and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies 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 Hudson Technologies and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Harmony Gold Mining, you can compare the effects of market volatilities on Hudson Technologies 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 Hudson Technologies with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Harmony Gold.
Diversification Opportunities for Hudson Technologies and Harmony Gold
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hudson and Harmony is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies 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 Hudson Technologies 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 Hudson Technologies 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 Hudson Technologies i.e., Hudson Technologies and Harmony Gold go up and down completely randomly.
Pair Corralation between Hudson Technologies and Harmony Gold
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 1.95 times less risky than Harmony Gold. The stock trades about -0.02 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 202.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 748.00 from holding Harmony Gold Mining or generate 370.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.38% |
| Values | Daily Returns |
Hudson Technologies vs. Harmony Gold Mining
Performance |
| Timeline |
| Hudson Technologies |
| Harmony Gold Mining |
Hudson Technologies and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Harmony Gold
The main advantage of trading using opposite Hudson Technologies and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies 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.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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