Correlation Between Ramsay Health and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Ramsay Health 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 Ramsay Health and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramsay Health Care and Harmony Gold Mining, you can compare the effects of market volatilities on Ramsay Health 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 Ramsay Health with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Harmony Gold.
Diversification Opportunities for Ramsay Health and Harmony Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ramsay and Harmony is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care 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 Ramsay Health 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 Ramsay Health Care 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 Ramsay Health i.e., Ramsay Health and Harmony Gold go up and down completely randomly.
Pair Corralation between Ramsay Health and Harmony Gold
Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 2.19 times less risky than Harmony Gold. The stock trades about -0.04 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 309.00 from holding Harmony Gold Mining or generate 57.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Health Care vs. Harmony Gold Mining
Performance |
| Timeline |
| Ramsay Health Care |
| Harmony Gold Mining |
Ramsay Health and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Health and Harmony Gold
The main advantage of trading using opposite Ramsay Health and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Health 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.| Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. NMI Holdings | Ramsay Health vs. Origin Agritech | Ramsay Health vs. SIVERS SEMICONDUCTORS AB |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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