Correlation Between Harmony Gold and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Harmony Gold and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Pekin Life.
Diversification Opportunities for Harmony Gold and Pekin Life
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Pekin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Harmony Gold i.e., Harmony Gold and Pekin Life go up and down completely randomly.
Pair Corralation between Harmony Gold and Pekin Life
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Pekin Life. In addition to that, Harmony Gold is 8.06 times more volatile than Pekin Life Insurance. It trades about -0.27 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.23 per unit of volatility. If you would invest 1,150 in Pekin Life Insurance on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Pekin Life Insurance or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Pekin Life Insurance
Performance |
| Timeline |
| Harmony Gold Mining |
| Pekin Life Insurance |
Harmony Gold and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Pekin Life
The main advantage of trading using opposite Harmony Gold and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life'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 |
| Pekin Life vs. HUMANA INC | Pekin Life vs. SCOR PK | Pekin Life vs. Aquagold International | Pekin Life vs. Thrivent High Yield |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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