Correlation Between Predictive Discovery and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Predictive Discovery 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 Predictive Discovery and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Predictive Discovery Limited and Harmony Gold Mining, you can compare the effects of market volatilities on Predictive Discovery 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 Predictive Discovery with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Predictive Discovery and Harmony Gold.
Diversification Opportunities for Predictive Discovery and Harmony Gold
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Predictive and Harmony is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Predictive Discovery 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 Predictive Discovery 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 Predictive Discovery 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 Predictive Discovery i.e., Predictive Discovery and Harmony Gold go up and down completely randomly.
Pair Corralation between Predictive Discovery and Harmony Gold
Assuming the 90 days horizon Predictive Discovery Limited is expected to generate 1.46 times more return on investment than Harmony Gold. However, Predictive Discovery is 1.46 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 0.03 per unit of risk. If you would invest 11.00 in Predictive Discovery Limited on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Predictive Discovery Limited or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Predictive Discovery Limited vs. Harmony Gold Mining
Performance |
| Timeline |
| Predictive Discovery |
| Harmony Gold Mining |
Predictive Discovery and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Predictive Discovery and Harmony Gold
The main advantage of trading using opposite Predictive Discovery and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Predictive Discovery 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.| Predictive Discovery vs. Harmony Gold Mining | Predictive Discovery vs. SPACE | Predictive Discovery vs. T Rowe Price | Predictive Discovery vs. Ampleforth |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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