Correlation Between Harmony Gold and Under Armour
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Under Armour 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 Under Armour 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 Under Armour C, you can compare the effects of market volatilities on Harmony Gold and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Under Armour.
Diversification Opportunities for Harmony Gold and Under Armour
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Under is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Harmony Gold i.e., Harmony Gold and Under Armour go up and down completely randomly.
Pair Corralation between Harmony Gold and Under Armour
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.16 times more return on investment than Under Armour. However, Harmony Gold is 1.16 times more volatile than Under Armour C. It trades about 0.08 of its potential returns per unit of risk. Under Armour C is currently generating about 0.03 per unit of risk. If you would invest 636.00 in Harmony Gold Mining on September 14, 2024 and sell it today you would earn a total of 314.00 from holding Harmony Gold Mining or generate 49.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.17% |
| Values | Daily Returns |
Harmony Gold Mining vs. Under Armour C
Performance |
| Timeline |
| Harmony Gold Mining |
| Under Armour C |
Harmony Gold and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Under Armour
The main advantage of trading using opposite Harmony Gold and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp | Harmony Gold vs. HUMANA INC |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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