Correlation Between Harmony Gold and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on Harmony Gold and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and National CineMedia.
Diversification Opportunities for Harmony Gold and National CineMedia
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and National is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Harmony Gold i.e., Harmony Gold and National CineMedia go up and down completely randomly.
Pair Corralation between Harmony Gold and National CineMedia
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.07 times more return on investment than National CineMedia. However, Harmony Gold is 1.07 times more volatile than National CineMedia. It trades about 0.09 of its potential returns per unit of risk. National CineMedia is currently generating about 0.09 per unit of risk. If you would invest 550.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 399.00 from holding Harmony Gold Mining or generate 72.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.26% |
| Values | Daily Returns |
Harmony Gold Mining vs. National CineMedia
Performance |
| Timeline |
| Harmony Gold Mining |
| National CineMedia |
Harmony Gold and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and National CineMedia
The main advantage of trading using opposite Harmony Gold and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Harmony Gold vs. Fernhill Beverage | Harmony Gold vs. Bridgford Foods | Harmony Gold vs. Grocery Outlet Holding | Harmony Gold vs. Romana Food Brands |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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