Correlation Between Harmony Gold and Franklin Street
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Franklin Street 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 Franklin Street 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 Franklin Street Properties, you can compare the effects of market volatilities on Harmony Gold and Franklin Street 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 Franklin Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Franklin Street.
Diversification Opportunities for Harmony Gold and Franklin Street
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Franklin Street Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Street Prop 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 Franklin Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Street Prop has no effect on the direction of Harmony Gold i.e., Harmony Gold and Franklin Street go up and down completely randomly.
Pair Corralation between Harmony Gold and Franklin Street
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Franklin Street. In addition to that, Harmony Gold is 1.21 times more volatile than Franklin Street Properties. It trades about -0.02 of its total potential returns per unit of risk. Franklin Street Properties is currently generating about 0.06 per unit of volatility. If you would invest 176.00 in Franklin Street Properties on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Street Properties or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Harmony Gold Mining vs. Franklin Street Properties
Performance |
| Timeline |
| Harmony Gold Mining |
| Franklin Street Prop |
Harmony Gold and Franklin Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Franklin Street
The main advantage of trading using opposite Harmony Gold and Franklin Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Franklin Street 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 Franklin Street will offset losses from the drop in Franklin Street's long position.| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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