Correlation Between HILTON WORLDWIDE and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both HILTON WORLDWIDE and Harmony Gold 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 HILTON WORLDWIDE and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HILTON WORLDWIDE HOLDINGS and Harmony Gold Mining, you can compare the effects of market volatilities on HILTON WORLDWIDE and Harmony Gold 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 HILTON WORLDWIDE with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of HILTON WORLDWIDE and Harmony Gold.
Diversification Opportunities for HILTON WORLDWIDE and Harmony Gold
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HILTON and Harmony is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding HILTON WORLDWIDE HOLDINGS and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and HILTON WORLDWIDE 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 HILTON WORLDWIDE HOLDINGS are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of HILTON WORLDWIDE i.e., HILTON WORLDWIDE and Harmony Gold go up and down completely randomly.
Pair Corralation between HILTON WORLDWIDE and Harmony Gold
Assuming the 90 days trading horizon HILTON WORLDWIDE HOLDINGS is expected to generate 0.34 times more return on investment than Harmony Gold. However, HILTON WORLDWIDE HOLDINGS is 2.92 times less risky than Harmony Gold. It trades about 0.18 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.05 per unit of risk. If you would invest 23,455 in HILTON WORLDWIDE HOLDINGS on September 12, 2024 and sell it today you would earn a total of 985.00 from holding HILTON WORLDWIDE HOLDINGS or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HILTON WORLDWIDE HOLDINGS vs. Harmony Gold Mining
Performance |
| Timeline |
| HILTON WORLDWIDE HOLDINGS |
| Harmony Gold Mining |
HILTON WORLDWIDE and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HILTON WORLDWIDE and Harmony Gold
The main advantage of trading using opposite HILTON WORLDWIDE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HILTON WORLDWIDE position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| HILTON WORLDWIDE vs. Check Point Software | HILTON WORLDWIDE vs. GUARDANT HEALTH CL | HILTON WORLDWIDE vs. Cardinal Health | HILTON WORLDWIDE vs. National Health Investors |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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