Correlation Between Harmony Gold and Virtus Dfa
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Virtus Dfa 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 Virtus Dfa 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 Virtus Dfa 2040, you can compare the effects of market volatilities on Harmony Gold and Virtus Dfa 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 Virtus Dfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Virtus Dfa.
Diversification Opportunities for Harmony Gold and Virtus Dfa
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Virtus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Virtus Dfa 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Dfa 2040 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 Virtus Dfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Dfa 2040 has no effect on the direction of Harmony Gold i.e., Harmony Gold and Virtus Dfa go up and down completely randomly.
Pair Corralation between Harmony Gold and Virtus Dfa
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Virtus Dfa. In addition to that, Harmony Gold is 7.19 times more volatile than Virtus Dfa 2040. It trades about -0.18 of its total potential returns per unit of risk. Virtus Dfa 2040 is currently generating about 0.35 per unit of volatility. If you would invest 1,175 in Virtus Dfa 2040 on September 3, 2024 and sell it today you would earn a total of 41.00 from holding Virtus Dfa 2040 or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Virtus Dfa 2040
Performance |
| Timeline |
| Harmony Gold Mining |
| Virtus Dfa 2040 |
Harmony Gold and Virtus Dfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Virtus Dfa
The main advantage of trading using opposite Harmony Gold and Virtus Dfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Virtus Dfa 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 Virtus Dfa will offset losses from the drop in Virtus Dfa'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 |
| Virtus Dfa vs. American Funds American | Virtus Dfa vs. American Funds American | Virtus Dfa vs. American Balanced | Virtus Dfa vs. American Balanced Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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