Correlation Between Under Armour and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Under Armour 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 Under Armour and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Under Armour C and Harmony Gold Mining, you can compare the effects of market volatilities on Under Armour 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 Under Armour with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Under Armour and Harmony Gold.
Diversification Opportunities for Under Armour and Harmony Gold
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Under and Harmony is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Under Armour C 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 Under Armour 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 Under Armour C 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 Under Armour i.e., Under Armour and Harmony Gold go up and down completely randomly.
Pair Corralation between Under Armour and Harmony Gold
Allowing for the 90-day total investment horizon Under Armour is expected to generate 169.51 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Under Armour C is 3.0 times less risky than Harmony Gold. It trades about 0.0 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 424.00 in Harmony Gold Mining on December 4, 2024 and sell it today you would earn a total of 776.00 from holding Harmony Gold Mining or generate 183.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 15.59% |
| Values | Daily Returns |
Under Armour C vs. Harmony Gold Mining
Performance |
| Timeline |
| Under Armour C |
| Harmony Gold Mining |
Under Armour and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Under Armour and Harmony Gold
The main advantage of trading using opposite Under Armour and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Under Armour 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.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
| Harmony Gold vs. New Oriental Education | Harmony Gold vs. MYT Netherlands Parent | Harmony Gold vs. Graham Holdings Co | Harmony Gold vs. Delek Logistics Partners |
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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