Correlation Between Harmony Gold and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Coupang LLC 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 Coupang LLC 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 Coupang LLC, you can compare the effects of market volatilities on Harmony Gold and Coupang LLC 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 Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Coupang LLC.
Diversification Opportunities for Harmony Gold and Coupang LLC
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and Coupang is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Harmony Gold i.e., Harmony Gold and Coupang LLC go up and down completely randomly.
Pair Corralation between Harmony Gold and Coupang LLC
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 1.44 times more return on investment than Coupang LLC. However, Harmony Gold is 1.44 times more volatile than Coupang LLC. It trades about 0.07 of its potential returns per unit of risk. Coupang LLC is currently generating about 0.08 per unit of risk. If you would invest 613.00 in Harmony Gold Mining on August 24, 2024 and sell it today you would earn a total of 353.00 from holding Harmony Gold Mining or generate 57.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Coupang LLC
Performance |
| Timeline |
| Harmony Gold Mining |
| Coupang LLC |
Harmony Gold and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Coupang LLC
The main advantage of trading using opposite Harmony Gold and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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