Correlation Between URW EO and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both URW EO 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 URW EO and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URW EO 05 and Harmony Gold Mining, you can compare the effects of market volatilities on URW EO 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 URW EO with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of URW EO and Harmony Gold.
Diversification Opportunities for URW EO and Harmony Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between URW and Harmony is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding URW EO 05 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 URW EO 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 URW EO 05 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 URW EO i.e., URW EO and Harmony Gold go up and down completely randomly.
Pair Corralation between URW EO and Harmony Gold
Assuming the 90 days trading horizon URW EO is expected to generate 8.82 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, URW EO 05 is 2.0 times less risky than Harmony Gold. It trades about 0.01 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 745.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 120.00 from holding Harmony Gold Mining or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
URW EO 05 vs. Harmony Gold Mining
Performance |
| Timeline |
| URW EO 05 |
| Harmony Gold Mining |
URW EO and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URW EO and Harmony Gold
The main advantage of trading using opposite URW EO and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URW EO 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.| URW EO vs. Lendlease Group | URW EO vs. Jacquet Metal Service | URW EO vs. BORR DRILLING NEW | URW EO vs. LION ONE METALS |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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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