Correlation Between Harmony Gold and Amazon
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on Harmony Gold and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Amazon.
Diversification Opportunities for Harmony Gold and Amazon
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Amazon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Amazon go up and down completely randomly.
Pair Corralation between Harmony Gold and Amazon
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Amazon. In addition to that, Harmony Gold is 1.8 times more volatile than Amazon Inc. It trades about -0.03 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.04 per unit of volatility. If you would invest 168,500 in Amazon Inc on September 13, 2024 and sell it today you would earn a total of 2,000 from holding Amazon Inc or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Amazon Inc
Performance |
| Timeline |
| Harmony Gold Mining |
| Amazon Inc |
Harmony Gold and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Amazon
The main advantage of trading using opposite Harmony Gold and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Harmony Gold vs. Edesa Holding SA | Harmony Gold vs. Vista Energy, SAB | Harmony Gold vs. United States Steel | Harmony Gold vs. Pfizer Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |