Correlation Between Importadora and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Importadora 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 Importadora and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Importadora y Exportadora and Harmony Gold Mining, you can compare the effects of market volatilities on Importadora 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 Importadora with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Importadora and Harmony Gold.
Diversification Opportunities for Importadora and Harmony Gold
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Importadora and Harmony is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Importadora y Exportadora 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 Importadora 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 Importadora y Exportadora 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 Importadora i.e., Importadora and Harmony Gold go up and down completely randomly.
Pair Corralation between Importadora and Harmony Gold
Assuming the 90 days trading horizon Importadora y Exportadora is expected to generate 1.12 times more return on investment than Harmony Gold. However, Importadora is 1.12 times more volatile than Harmony Gold Mining. It trades about 0.09 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 per unit of risk. If you would invest 79,400 in Importadora y Exportadora on September 14, 2024 and sell it today you would earn a total of 92,600 from holding Importadora y Exportadora or generate 116.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Importadora y Exportadora vs. Harmony Gold Mining
Performance |
| Timeline |
| Importadora y Exportadora |
| Harmony Gold Mining |
Importadora and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Importadora and Harmony Gold
The main advantage of trading using opposite Importadora and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Importadora 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.| Importadora vs. Harmony Gold Mining | Importadora vs. Compania de Transporte | Importadora vs. United States Steel |
| Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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