Correlation Between Harmony Gold and J Long
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and J Long 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 J Long 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 J Long Group Limited, you can compare the effects of market volatilities on Harmony Gold and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and J Long.
Diversification Opportunities for Harmony Gold and J Long
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and J Long is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Harmony Gold i.e., Harmony Gold and J Long go up and down completely randomly.
Pair Corralation between Harmony Gold and J Long
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.32 times more return on investment than J Long. However, Harmony Gold Mining is 3.08 times less risky than J Long. It trades about -0.28 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.33 per unit of risk. If you would invest 1,137 in Harmony Gold Mining on August 30, 2024 and sell it today you would lose (230.00) from holding Harmony Gold Mining or give up 20.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. J Long Group Limited
Performance |
| Timeline |
| Harmony Gold Mining |
| J Long Group |
Harmony Gold and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and J Long
The main advantage of trading using opposite Harmony Gold and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, J Long 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 J Long will offset losses from the drop in J Long'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 |
| J Long vs. The Gap, | J Long vs. SunLink Health Systems | J Long vs. SNDL Inc | J Long vs. Marfrig Global Foods |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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