Correlation Between Harmony Gold and Vindicator Silver
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Vindicator Silver 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 Vindicator Silver 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 Vindicator Silver Lead Mining, you can compare the effects of market volatilities on Harmony Gold and Vindicator Silver 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 Vindicator Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Vindicator Silver.
Diversification Opportunities for Harmony Gold and Vindicator Silver
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Vindicator is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Vindicator Silver Lead Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vindicator Silver Lead 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 Vindicator Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vindicator Silver Lead has no effect on the direction of Harmony Gold i.e., Harmony Gold and Vindicator Silver go up and down completely randomly.
Pair Corralation between Harmony Gold and Vindicator Silver
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.93 times more return on investment than Vindicator Silver. However, Harmony Gold Mining is 1.08 times less risky than Vindicator Silver. It trades about 0.01 of its potential returns per unit of risk. Vindicator Silver Lead Mining is currently generating about -0.21 per unit of risk. If you would invest 950.00 in Harmony Gold Mining on October 26, 2024 and sell it today you would lose (1.00) from holding Harmony Gold Mining or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Vindicator Silver Lead Mining
Performance |
| Timeline |
| Harmony Gold Mining |
| Vindicator Silver Lead |
Harmony Gold and Vindicator Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Vindicator Silver
The main advantage of trading using opposite Harmony Gold and Vindicator Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Vindicator Silver 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 Vindicator Silver will offset losses from the drop in Vindicator Silver's long position.| Harmony Gold vs. Almadex Minerals | Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp |
| Vindicator Silver vs. HUMANA INC | Vindicator Silver vs. Aquagold International | Vindicator Silver vs. Barloworld Ltd ADR | Vindicator Silver vs. Morningstar Unconstrained Allocation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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