Correlation Between Turning Point and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Harmony Gold Mining, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Harmony Gold.
Diversification Opportunities for Turning Point and Harmony Gold
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Turning and Harmony is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Harmony Gold go up and down completely randomly.
Pair Corralation between Turning Point and Harmony Gold
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.52 times more return on investment than Harmony Gold. However, Turning Point Brands is 1.93 times less risky than Harmony Gold. It trades about 0.52 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.21 per unit of risk. If you would invest 4,699 in Turning Point Brands on August 30, 2024 and sell it today you would earn a total of 1,442 from holding Turning Point Brands or generate 30.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Turning Point Brands vs. Harmony Gold Mining
Performance |
| Timeline |
| Turning Point Brands |
| Harmony Gold Mining |
Turning Point and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Harmony Gold
The main advantage of trading using opposite Turning Point and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Harmony Gold vs. SNDL Inc | Harmony Gold vs. Tyson Foods | Harmony Gold vs. Century Aluminum | Harmony Gold vs. Olympic Steel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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