Correlation Between Harmony Gold and U Haul
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and U Haul 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 U Haul 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 U Haul Holding, you can compare the effects of market volatilities on Harmony Gold and U Haul 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 U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and U Haul.
Diversification Opportunities for Harmony Gold and U Haul
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and UHAL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul Holding 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 U Haul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of Harmony Gold i.e., Harmony Gold and U Haul go up and down completely randomly.
Pair Corralation between Harmony Gold and U Haul
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.17 times more return on investment than U Haul. However, Harmony Gold is 2.17 times more volatile than U Haul Holding. It trades about 0.08 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.05 per unit of risk. If you would invest 636.00 in Harmony Gold Mining on September 3, 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 Together |
| Strength | Insignificant |
| Accuracy | 68.83% |
| Values | Daily Returns |
Harmony Gold Mining vs. U Haul Holding
Performance |
| Timeline |
| Harmony Gold Mining |
| U Haul Holding |
Harmony Gold and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and U Haul
The main advantage of trading using opposite Harmony Gold and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, U Haul 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 U Haul will offset losses from the drop in U Haul's long position.| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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