Correlation Between Revival Gold and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Revival Gold 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 Revival Gold and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revival Gold and Harmony Gold Mining, you can compare the effects of market volatilities on Revival Gold 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 Revival Gold with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revival Gold and Harmony Gold.
Diversification Opportunities for Revival Gold and Harmony Gold
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Revival and Harmony is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Revival Gold 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 Revival Gold 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 Revival Gold 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 Revival Gold i.e., Revival Gold and Harmony Gold go up and down completely randomly.
Pair Corralation between Revival Gold and Harmony Gold
Assuming the 90 days horizon Revival Gold is expected to under-perform the Harmony Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Revival Gold is 1.13 times less risky than Harmony Gold. The otc stock trades about -0.03 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 475.00 from holding Harmony Gold Mining or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 51.42% |
| Values | Daily Returns |
Revival Gold vs. Harmony Gold Mining
Performance |
| Timeline |
| Revival Gold |
| Harmony Gold Mining |
Revival Gold and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revival Gold and Harmony Gold
The main advantage of trading using opposite Revival Gold and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revival Gold 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.| Revival Gold vs. Galiano Gold | Revival Gold vs. US Gold Corp | Revival Gold vs. HUMANA INC | Revival Gold vs. Barloworld Ltd ADR |
| Harmony Gold vs. Revival Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. US Gold Corp | Harmony Gold vs. HUMANA INC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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