Correlation Between Harmony Gold and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Reservoir Media 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 Reservoir Media 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 Reservoir Media, you can compare the effects of market volatilities on Harmony Gold and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Reservoir Media.
Diversification Opportunities for Harmony Gold and Reservoir Media
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Reservoir is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Harmony Gold i.e., Harmony Gold and Reservoir Media go up and down completely randomly.
Pair Corralation between Harmony Gold and Reservoir Media
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.6 times more return on investment than Reservoir Media. However, Harmony Gold is 2.6 times more volatile than Reservoir Media. It trades about 0.1 of its potential returns per unit of risk. Reservoir Media is currently generating about 0.05 per unit of risk. If you would invest 202.00 in Harmony Gold Mining on August 30, 2024 and sell it today you would earn a total of 748.00 from holding Harmony Gold Mining or generate 370.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.45% |
| Values | Daily Returns |
Harmony Gold Mining vs. Reservoir Media
Performance |
| Timeline |
| Harmony Gold Mining |
| Reservoir Media |
Harmony Gold and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Reservoir Media
The main advantage of trading using opposite Harmony Gold and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media's long position.| Harmony Gold vs. Vertiv Holdings Co | Harmony Gold vs. Nasdaq Inc | Harmony Gold vs. McDonalds | Harmony Gold vs. Walmart |
| Reservoir Media vs. Reading International | Reservoir Media vs. Marcus | Reservoir Media vs. Gaia Inc | Reservoir Media vs. News Corp B |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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