Correlation Between Harmony Gold and Zura Bio
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Zura Bio 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 Zura Bio 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 Zura Bio Limited, you can compare the effects of market volatilities on Harmony Gold and Zura Bio 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 Zura Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Zura Bio.
Diversification Opportunities for Harmony Gold and Zura Bio
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harmony and Zura is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited 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 Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Harmony Gold i.e., Harmony Gold and Zura Bio go up and down completely randomly.
Pair Corralation between Harmony Gold and Zura Bio
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.63 times more return on investment than Zura Bio. However, Harmony Gold Mining is 1.6 times less risky than Zura Bio. It trades about 0.04 of its potential returns per unit of risk. Zura Bio Limited is currently generating about -0.09 per unit of risk. If you would invest 889.00 in Harmony Gold Mining on October 22, 2024 and sell it today you would earn a total of 88.00 from holding Harmony Gold Mining or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Zura Bio Limited
Performance |
| Timeline |
| Harmony Gold Mining |
| Zura Bio Limited |
Harmony Gold and Zura Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Zura Bio
The main advantage of trading using opposite Harmony Gold and Zura Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Zura Bio 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 Zura Bio will offset losses from the drop in Zura Bio'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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