Correlation Between ATRenew and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both ATRenew 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 ATRenew and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRenew Inc DRC and Harmony Gold Mining, you can compare the effects of market volatilities on ATRenew 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 ATRenew with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRenew and Harmony Gold.
Diversification Opportunities for ATRenew and Harmony Gold
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATRenew and Harmony is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC 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 ATRenew 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 ATRenew Inc DRC 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 ATRenew i.e., ATRenew and Harmony Gold go up and down completely randomly.
Pair Corralation between ATRenew and Harmony Gold
Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 1.56 times more return on investment than Harmony Gold. However, ATRenew is 1.56 times more volatile than Harmony Gold Mining. It trades about 0.06 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.04 per unit of risk. If you would invest 259.00 in ATRenew Inc DRC on September 3, 2024 and sell it today you would earn a total of 70.00 from holding ATRenew Inc DRC or generate 27.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
ATRenew Inc DRC vs. Harmony Gold Mining
Performance |
| Timeline |
| ATRenew Inc DRC |
| Harmony Gold Mining |
ATRenew and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRenew and Harmony Gold
The main advantage of trading using opposite ATRenew and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew 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.The idea behind ATRenew Inc DRC and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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