Correlation Between Harmony Gold and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on Harmony Gold and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Weibo Corp.
Diversification Opportunities for Harmony Gold and Weibo Corp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Weibo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Weibo Corp go up and down completely randomly.
Pair Corralation between Harmony Gold and Weibo Corp
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Weibo Corp. In addition to that, Harmony Gold is 1.14 times more volatile than Weibo Corp. It trades about -0.25 of its total potential returns per unit of risk. Weibo Corp is currently generating about 0.08 per unit of volatility. If you would invest 916.00 in Weibo Corp on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Weibo Corp or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Weibo Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| Weibo Corp |
Harmony Gold and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Weibo Corp
The main advantage of trading using opposite Harmony Gold and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp'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 |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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