Correlation Between Harmony Gold and Edesa Holding
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Edesa Holding 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 Edesa Holding 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 Edesa Holding SA, you can compare the effects of market volatilities on Harmony Gold and Edesa Holding 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 Edesa Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Edesa Holding.
Diversification Opportunities for Harmony Gold and Edesa Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harmony and Edesa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Edesa Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edesa Holding SA 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 Edesa Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edesa Holding SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Edesa Holding go up and down completely randomly.
Pair Corralation between Harmony Gold and Edesa Holding
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 13.94 times more return on investment than Edesa Holding. However, Harmony Gold is 13.94 times more volatile than Edesa Holding SA. It trades about 0.07 of its potential returns per unit of risk. Edesa Holding SA is currently generating about 0.06 per unit of risk. If you would invest 613,200 in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of 365,800 from holding Harmony Gold Mining or generate 59.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Harmony Gold Mining vs. Edesa Holding SA
Performance |
| Timeline |
| Harmony Gold Mining |
| Edesa Holding SA |
Harmony Gold and Edesa Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Edesa Holding
The main advantage of trading using opposite Harmony Gold and Edesa Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Edesa Holding 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 Edesa Holding will offset losses from the drop in Edesa Holding's long position.| Harmony Gold vs. Longvie SA | Harmony Gold vs. United States Steel | Harmony Gold vs. Capex SA | 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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