Correlation Between Jacobs Solutions and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Harmony Gold 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 Jacobs Solutions and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Harmony Gold Mining, you can compare the effects of market volatilities on Jacobs Solutions and Harmony Gold 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 Jacobs Solutions with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Harmony Gold.
Diversification Opportunities for Jacobs Solutions and Harmony Gold
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and Harmony is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and Jacobs Solutions 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 Jacobs Solutions are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Harmony Gold go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Harmony Gold
Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Jacobs Solutions is 4.61 times less risky than Harmony Gold. The stock trades about -0.08 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Harmony Gold Mining on November 30, 2024 and sell it today you would earn a total of 373.00 from holding Harmony Gold Mining or generate 45.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.37% |
| Values | Daily Returns |
Jacobs Solutions vs. Harmony Gold Mining
Performance |
| Timeline |
| Jacobs Solutions |
| Harmony Gold Mining |
Jacobs Solutions and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Harmony Gold
The main advantage of trading using opposite Jacobs Solutions and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Jacobs Solutions vs. Granite Construction Incorporated | Jacobs Solutions vs. Matrix Service Co | Jacobs Solutions vs. Construction Partners | Jacobs Solutions vs. MYR Group |
| Harmony Gold vs. Kilroy Realty Corp | Harmony Gold vs. Unilever PLC ADR | Harmony Gold vs. World Houseware Limited | Harmony Gold vs. Church Dwight |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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