Correlation Between Harmony Gold and Walmart
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Harmony Gold and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Walmart.
Diversification Opportunities for Harmony Gold and Walmart
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Walmart is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Harmony Gold i.e., Harmony Gold and Walmart go up and down completely randomly.
Pair Corralation between Harmony Gold and Walmart
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Walmart. In addition to that, Harmony Gold is 1.97 times more volatile than Walmart. It trades about -0.13 of its total potential returns per unit of risk. Walmart is currently generating about 0.38 per unit of volatility. If you would invest 539,000 in Walmart on September 19, 2024 and sell it today you would earn a total of 65,000 from holding Walmart or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Walmart
Performance |
| Timeline |
| Harmony Gold Mining |
| Walmart |
Harmony Gold and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Walmart
The main advantage of trading using opposite Harmony Gold and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Harmony Gold vs. Telecom Argentina | Harmony Gold vs. Agrometal SAI | Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. Compania de Transporte |
| Walmart vs. Compania de Transporte | Walmart vs. Harmony Gold Mining | Walmart vs. Agrometal SAI | Walmart 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 CEOs Directory module to screen CEOs from public companies around the world.
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