Correlation Between Kontoor Brands and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Harmony Gold Mining, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Harmony Gold.
Diversification Opportunities for Kontoor Brands and Harmony Gold
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kontoor and Harmony is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Harmony Gold go up and down completely randomly.
Pair Corralation between Kontoor Brands and Harmony Gold
Considering the 90-day investment horizon Kontoor Brands is expected to generate 0.4 times more return on investment than Harmony Gold. However, Kontoor Brands is 2.52 times less risky than Harmony Gold. It trades about -0.14 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.22 per unit of risk. If you would invest 8,938 in Kontoor Brands on October 7, 2024 and sell it today you would lose (290.00) from holding Kontoor Brands or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Harmony Gold Mining
Performance |
| Timeline |
| Kontoor Brands |
| Harmony Gold Mining |
Kontoor Brands and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Harmony Gold
The main advantage of trading using opposite Kontoor Brands and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| Harmony Gold vs. Newmont Goldcorp Corp | Harmony Gold vs. Zijin Mining Group | Harmony Gold vs. Zijin Mining Group | Harmony Gold vs. Agnico Eagle Mines |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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