Correlation Between Harmony Gold and Qualys
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Qualys 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 Qualys 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 Qualys Inc, you can compare the effects of market volatilities on Harmony Gold and Qualys 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 Qualys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Qualys.
Diversification Opportunities for Harmony Gold and Qualys
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Qualys is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys Inc 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 Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Qualys go up and down completely randomly.
Pair Corralation between Harmony Gold and Qualys
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Qualys. But the stock apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 1.61 times less risky than Qualys. The stock trades about -0.21 of its potential returns per unit of risk. The Qualys Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 11,924 in Qualys Inc on September 1, 2024 and sell it today you would earn a total of 3,436 from holding Qualys Inc or generate 28.82% 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. Qualys Inc
Performance |
| Timeline |
| Harmony Gold Mining |
| Qualys Inc |
Harmony Gold and Qualys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Qualys
The main advantage of trading using opposite Harmony Gold and Qualys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Qualys 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 Qualys will offset losses from the drop in Qualys' 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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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