Correlation Between Harmony Gold and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sonida Senior 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 Sonida Senior 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 Sonida Senior Living, you can compare the effects of market volatilities on Harmony Gold and Sonida Senior 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 Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sonida Senior.
Diversification Opportunities for Harmony Gold and Sonida Senior
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Sonida is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sonida Senior go up and down completely randomly.
Pair Corralation between Harmony Gold and Sonida Senior
Considering the 90-day investment horizon Harmony Gold is expected to generate 1.51 times less return on investment than Sonida Senior. But when comparing it to its historical volatility, Harmony Gold Mining is 1.37 times less risky than Sonida Senior. It trades about 0.08 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 849.00 in Sonida Senior Living on August 27, 2024 and sell it today you would earn a total of 1,634 from holding Sonida Senior Living or generate 192.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Harmony Gold Mining vs. Sonida Senior Living
Performance |
| Timeline |
| Harmony Gold Mining |
| Sonida Senior Living |
Harmony Gold and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sonida Senior
The main advantage of trading using opposite Harmony Gold and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior's long position.The idea behind Harmony Gold Mining and Sonida Senior Living pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sonida Senior vs. Heartbeam | Sonida Senior vs. EUDA Health Holdings | Sonida Senior vs. Nutex Health | Sonida Senior vs. Healthcare Triangle |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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