Correlation Between Harmony Gold and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Nexstar Broadcasting 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 Nexstar Broadcasting 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 Nexstar Broadcasting Group, you can compare the effects of market volatilities on Harmony Gold and Nexstar Broadcasting 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 Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Nexstar Broadcasting.
Diversification Opportunities for Harmony Gold and Nexstar Broadcasting
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Nexstar is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting 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 Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Harmony Gold i.e., Harmony Gold and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Harmony Gold and Nexstar Broadcasting
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Nexstar Broadcasting. In addition to that, Harmony Gold is 1.39 times more volatile than Nexstar Broadcasting Group. It trades about -0.21 of its total potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about -0.01 per unit of volatility. If you would invest 17,468 in Nexstar Broadcasting Group on August 30, 2024 and sell it today you would lose (353.00) from holding Nexstar Broadcasting Group or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Harmony Gold Mining |
| Nexstar Broadcasting |
Harmony Gold and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Nexstar Broadcasting
The main advantage of trading using opposite Harmony Gold and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Nexstar Broadcasting 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 Nexstar Broadcasting will offset losses from the drop in Nexstar Broadcasting's long position.| Harmony Gold vs. SNDL Inc | Harmony Gold vs. Tyson Foods | Harmony Gold vs. Century Aluminum | Harmony Gold vs. Olympic Steel |
| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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