Correlation Between Harmony Gold and Vertiv Holdings
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Vertiv Holdings 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 Vertiv Holdings 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 Vertiv Holdings Co, you can compare the effects of market volatilities on Harmony Gold and Vertiv Holdings 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 Vertiv Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Vertiv Holdings.
Diversification Opportunities for Harmony Gold and Vertiv Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Vertiv is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Vertiv Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertiv Holdings 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 Vertiv Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertiv Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and Vertiv Holdings go up and down completely randomly.
Pair Corralation between Harmony Gold and Vertiv Holdings
Assuming the 90 days horizon Harmony Gold is expected to generate 2.53 times less return on investment than Vertiv Holdings. But when comparing it to its historical volatility, Harmony Gold Mining is 1.31 times less risky than Vertiv Holdings. It trades about 0.04 of its potential returns per unit of risk. Vertiv Holdings Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,802 in Vertiv Holdings Co on August 29, 2024 and sell it today you would earn a total of 2,892 from holding Vertiv Holdings Co or generate 29.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Harmony Gold Mining vs. Vertiv Holdings Co
Performance |
| Timeline |
| Harmony Gold Mining |
| Vertiv Holdings |
Harmony Gold and Vertiv Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Vertiv Holdings
The main advantage of trading using opposite Harmony Gold and Vertiv Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Vertiv Holdings 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 Vertiv Holdings will offset losses from the drop in Vertiv Holdings' long position.| Harmony Gold vs. Vertiv Holdings Co | Harmony Gold vs. Nasdaq Inc | Harmony Gold vs. McDonalds | Harmony Gold vs. Walmart |
| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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