Correlation Between Harmony Gold and Scholastic
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Scholastic 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 Scholastic 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 Scholastic, you can compare the effects of market volatilities on Harmony Gold and Scholastic 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 Scholastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Scholastic.
Diversification Opportunities for Harmony Gold and Scholastic
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Scholastic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Scholastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholastic 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 Scholastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholastic has no effect on the direction of Harmony Gold i.e., Harmony Gold and Scholastic go up and down completely randomly.
Pair Corralation between Harmony Gold and Scholastic
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.89 times more return on investment than Scholastic. However, Harmony Gold is 1.89 times more volatile than Scholastic. It trades about 0.1 of its potential returns per unit of risk. Scholastic is currently generating about -0.04 per unit of risk. If you would invest 475.00 in Harmony Gold Mining on August 31, 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 | 54.01% |
| Values | Daily Returns |
Harmony Gold Mining vs. Scholastic
Performance |
| Timeline |
| Harmony Gold Mining |
| Scholastic |
Harmony Gold and Scholastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Scholastic
The main advantage of trading using opposite Harmony Gold and Scholastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Scholastic 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 Scholastic will offset losses from the drop in Scholastic's long position.| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. BTU Metals Corp |
| Scholastic vs. New York Times | Scholastic vs. Gannett Co | Scholastic vs. Lee Enterprises Incorporated | Scholastic vs. Pearson PLC ADR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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