Correlation Between Harmony Gold and Gentex
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on Harmony Gold and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Gentex.
Diversification Opportunities for Harmony Gold and Gentex
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Gentex is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Harmony Gold i.e., Harmony Gold and Gentex go up and down completely randomly.
Pair Corralation between Harmony Gold and Gentex
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Gentex. In addition to that, Harmony Gold is 3.26 times more volatile than Gentex. It trades about -0.22 of its total potential returns per unit of risk. Gentex is currently generating about 0.07 per unit of volatility. If you would invest 3,036 in Gentex on September 13, 2024 and sell it today you would earn a total of 55.00 from holding Gentex or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Gentex
Performance |
| Timeline |
| Harmony Gold Mining |
| Gentex |
Harmony Gold and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Gentex
The main advantage of trading using opposite Harmony Gold and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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