Correlation Between J Long and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both J Long 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 J Long and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Harmony Gold Mining, you can compare the effects of market volatilities on J Long 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 J Long with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Harmony Gold.
Diversification Opportunities for J Long and Harmony Gold
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between J Long and Harmony is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited 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 J Long 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 J Long Group Limited 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 J Long i.e., J Long and Harmony Gold go up and down completely randomly.
Pair Corralation between J Long and Harmony Gold
Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 3.66 times more return on investment than Harmony Gold. However, J Long is 3.66 times more volatile than Harmony Gold Mining. It trades about 0.02 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.05 per unit of risk. If you would invest 40.00 in J Long Group Limited on August 30, 2024 and sell it today you would lose (8.00) from holding J Long Group Limited or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Harmony Gold Mining
Performance |
| Timeline |
| J Long Group |
| Harmony Gold Mining |
J Long and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Harmony Gold
The main advantage of trading using opposite J Long and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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.| J Long vs. The Gap, | J Long vs. SunLink Health Systems | J Long vs. SNDL Inc | J Long vs. Marfrig Global Foods |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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