Correlation Between Harmony Gold and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Avient Corp 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 Avient Corp 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 Avient Corp, you can compare the effects of market volatilities on Harmony Gold and Avient Corp 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 Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Avient Corp.
Diversification Opportunities for Harmony Gold and Avient Corp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Avient is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Avient Corp go up and down completely randomly.
Pair Corralation between Harmony Gold and Avient Corp
Assuming the 90 days horizon Harmony Gold is expected to generate 1.44 times less return on investment than Avient Corp. In addition to that, Harmony Gold is 1.44 times more volatile than Avient Corp. It trades about 0.04 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.07 per unit of volatility. If you would invest 4,343 in Avient Corp on September 2, 2024 and sell it today you would earn a total of 782.00 from holding Avient Corp or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Harmony Gold Mining vs. Avient Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| Avient Corp |
Harmony Gold and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Avient Corp
The main advantage of trading using opposite Harmony Gold and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. Grande Portage Resources |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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