Correlation Between Star Alliance and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Star Alliance 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 Star Alliance and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Alliance International and Harmony Gold Mining, you can compare the effects of market volatilities on Star Alliance 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 Star Alliance with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Alliance and Harmony Gold.
Diversification Opportunities for Star Alliance and Harmony Gold
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Star and Harmony is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Star Alliance International 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 Star Alliance 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 Star Alliance International 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 Star Alliance i.e., Star Alliance and Harmony Gold go up and down completely randomly.
Pair Corralation between Star Alliance and Harmony Gold
Given the investment horizon of 90 days Star Alliance International is expected to under-perform the Harmony Gold. In addition to that, Star Alliance is 2.81 times more volatile than Harmony Gold Mining. It trades about -0.11 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.18 per unit of volatility. If you would invest 1,055 in Harmony Gold Mining on September 3, 2024 and sell it today you would lose (136.00) from holding Harmony Gold Mining or give up 12.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Star Alliance International vs. Harmony Gold Mining
Performance |
| Timeline |
| Star Alliance Intern |
| Harmony Gold Mining |
Star Alliance and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Alliance and Harmony Gold
The main advantage of trading using opposite Star Alliance and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Alliance 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.| Star Alliance vs. Harmony Gold Mining | Star Alliance vs. SPACE | Star Alliance vs. T Rowe Price | Star Alliance 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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