Correlation Between Harmony Gold and Laboratorios Richmond
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Laboratorios Richmond 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 Laboratorios Richmond 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 Laboratorios Richmond SACIF, you can compare the effects of market volatilities on Harmony Gold and Laboratorios Richmond 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 Laboratorios Richmond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Laboratorios Richmond.
Diversification Opportunities for Harmony Gold and Laboratorios Richmond
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Laboratorios is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Laboratorios Richmond SACIF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratorios Richmond 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 Laboratorios Richmond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratorios Richmond has no effect on the direction of Harmony Gold i.e., Harmony Gold and Laboratorios Richmond go up and down completely randomly.
Pair Corralation between Harmony Gold and Laboratorios Richmond
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.9 times more return on investment than Laboratorios Richmond. However, Harmony Gold Mining is 1.11 times less risky than Laboratorios Richmond. It trades about 0.51 of its potential returns per unit of risk. Laboratorios Richmond SACIF is currently generating about 0.03 per unit of risk. If you would invest 961,000 in Harmony Gold Mining on October 20, 2024 and sell it today you would earn a total of 191,500 from holding Harmony Gold Mining or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Laboratorios Richmond SACIF
Performance |
| Timeline |
| Harmony Gold Mining |
| Laboratorios Richmond |
Harmony Gold and Laboratorios Richmond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Laboratorios Richmond
The main advantage of trading using opposite Harmony Gold and Laboratorios Richmond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Laboratorios Richmond 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 Laboratorios Richmond will offset losses from the drop in Laboratorios Richmond's long position.| Harmony Gold vs. United States Steel | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
| Laboratorios Richmond vs. Harmony Gold Mining | Laboratorios Richmond vs. Agrometal SAI | Laboratorios Richmond vs. Transportadora de Gas | Laboratorios Richmond vs. United States Steel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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