Correlation Between Harmony Gold and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Thor Industries 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 Thor Industries 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 Thor Industries, you can compare the effects of market volatilities on Harmony Gold and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Thor Industries.
Diversification Opportunities for Harmony Gold and Thor Industries
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and Thor is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Harmony Gold i.e., Harmony Gold and Thor Industries go up and down completely randomly.
Pair Corralation between Harmony Gold and Thor Industries
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Thor Industries. In addition to that, Harmony Gold is 1.8 times more volatile than Thor Industries. It trades about -0.23 of its total potential returns per unit of risk. Thor Industries is currently generating about -0.34 per unit of volatility. If you would invest 10,407 in Thor Industries on October 14, 2024 and sell it today you would lose (1,075) from holding Thor Industries or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Thor Industries
Performance |
| Timeline |
| Harmony Gold Mining |
| Thor Industries |
Harmony Gold and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Thor Industries
The main advantage of trading using opposite Harmony Gold and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Harmony Gold vs. Vodka Brands Corp | Harmony Gold vs. Universal Stainless Alloy | Harmony Gold vs. Nippon Steel Corp | Harmony Gold vs. Safety Shot |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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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