Correlation Between Harmony Gold and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on Harmony Gold and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and China Aircraft.
Diversification Opportunities for Harmony Gold and China Aircraft
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and China is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Harmony Gold i.e., Harmony Gold and China Aircraft go up and down completely randomly.
Pair Corralation between Harmony Gold and China Aircraft
Assuming the 90 days horizon Harmony Gold is expected to generate 1.16 times less return on investment than China Aircraft. But when comparing it to its historical volatility, Harmony Gold Mining is 1.15 times less risky than China Aircraft. It trades about 0.08 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in China Aircraft Leasing on September 3, 2024 and sell it today you would earn a total of 20.00 from holding China Aircraft Leasing or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.83% |
| Values | Daily Returns |
Harmony Gold Mining vs. China Aircraft Leasing
Performance |
| Timeline |
| Harmony Gold Mining |
| China Aircraft Leasing |
Harmony Gold and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and China Aircraft
The main advantage of trading using opposite Harmony Gold and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
| China Aircraft vs. United Rentals | China Aircraft vs. Ashtead Gro | China Aircraft vs. Ashtead Group plc | China Aircraft vs. AerCap Holdings NV |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |