Correlation Between FIREWEED METALS and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS 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 FIREWEED METALS and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and Harmony Gold Mining, you can compare the effects of market volatilities on FIREWEED METALS 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 FIREWEED METALS with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and Harmony Gold.
Diversification Opportunities for FIREWEED METALS and Harmony Gold
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIREWEED and Harmony is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P 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 FIREWEED METALS 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 FIREWEED METALS P 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 FIREWEED METALS i.e., FIREWEED METALS and Harmony Gold go up and down completely randomly.
Pair Corralation between FIREWEED METALS and Harmony Gold
Assuming the 90 days horizon FIREWEED METALS is expected to generate 1.71 times less return on investment than Harmony Gold. In addition to that, FIREWEED METALS is 1.13 times more volatile than Harmony Gold Mining. It trades about 0.04 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 per unit of volatility. If you would invest 317.00 in Harmony Gold Mining on October 19, 2024 and sell it today you would earn a total of 608.00 from holding Harmony Gold Mining or generate 191.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIREWEED METALS P vs. Harmony Gold Mining
Performance |
| Timeline |
| FIREWEED METALS P |
| Harmony Gold Mining |
FIREWEED METALS and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIREWEED METALS and Harmony Gold
The main advantage of trading using opposite FIREWEED METALS and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS 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.| FIREWEED METALS vs. GAMESTOP | FIREWEED METALS vs. Ubisoft Entertainment SA | FIREWEED METALS vs. SQUIRREL MEDIA SA | FIREWEED METALS vs. Flutter Entertainment PLC |
| Harmony Gold vs. Apollo Investment Corp | Harmony Gold vs. Siemens Healthineers AG | Harmony Gold vs. National Health Investors | Harmony Gold vs. WESANA HEALTH HOLD |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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