Correlation Between Harmony Gold and Eastman Kodak
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Eastman Kodak 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 Eastman Kodak 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 Eastman Kodak Co, you can compare the effects of market volatilities on Harmony Gold and Eastman Kodak 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 Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Eastman Kodak.
Diversification Opportunities for Harmony Gold and Eastman Kodak
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Eastman is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak 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 Eastman Kodak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Kodak has no effect on the direction of Harmony Gold i.e., Harmony Gold and Eastman Kodak go up and down completely randomly.
Pair Corralation between Harmony Gold and Eastman Kodak
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.14 times more return on investment than Eastman Kodak. However, Harmony Gold is 1.14 times more volatile than Eastman Kodak Co. It trades about 0.1 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.03 per unit of risk. If you would invest 475.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 475.00 from holding Harmony Gold Mining or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 51.42% |
| Values | Daily Returns |
Harmony Gold Mining vs. Eastman Kodak Co
Performance |
| Timeline |
| Harmony Gold Mining |
| Eastman Kodak |
Harmony Gold and Eastman Kodak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Eastman Kodak
The main advantage of trading using opposite Harmony Gold and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Eastman Kodak 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 Eastman Kodak will offset losses from the drop in Eastman Kodak's long position.| Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp | Harmony Gold vs. HUMANA INC |
| Eastman Kodak vs. SMX Public Limited | Eastman Kodak vs. System1 | Eastman Kodak vs. Lichen China Limited | Eastman Kodak vs. Team 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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