Correlation Between Harmony Gold and Vera Bradley
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Vera Bradley 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 Vera Bradley 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 Vera Bradley, you can compare the effects of market volatilities on Harmony Gold and Vera Bradley 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 Vera Bradley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Vera Bradley.
Diversification Opportunities for Harmony Gold and Vera Bradley
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Vera is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Vera Bradley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vera Bradley 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 Vera Bradley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vera Bradley has no effect on the direction of Harmony Gold i.e., Harmony Gold and Vera Bradley go up and down completely randomly.
Pair Corralation between Harmony Gold and Vera Bradley
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Vera Bradley. In addition to that, Harmony Gold is 1.12 times more volatile than Vera Bradley. It trades about -0.21 of its total potential returns per unit of risk. Vera Bradley is currently generating about -0.2 per unit of volatility. If you would invest 536.00 in Vera Bradley on September 13, 2024 and sell it today you would lose (93.00) from holding Vera Bradley or give up 17.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Vera Bradley
Performance |
| Timeline |
| Harmony Gold Mining |
| Vera Bradley |
Harmony Gold and Vera Bradley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Vera Bradley
The main advantage of trading using opposite Harmony Gold and Vera Bradley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Vera Bradley 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 Vera Bradley will offset losses from the drop in Vera Bradley's long position.| Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp | Harmony Gold vs. HUMANA INC |
| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Wolverine World Wide | Vera Bradley vs. Caleres |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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