Correlation Between Vertiv Holdings and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings 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 Vertiv Holdings and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vertiv Holdings Co and Harmony Gold Mining, you can compare the effects of market volatilities on Vertiv Holdings 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 Vertiv Holdings with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Harmony Gold.
Diversification Opportunities for Vertiv Holdings and Harmony Gold
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vertiv and Harmony is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co 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 Vertiv Holdings 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 Vertiv Holdings Co 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 Vertiv Holdings i.e., Vertiv Holdings and Harmony Gold go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Harmony Gold
Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Vertiv Holdings Co is 1.45 times less risky than Harmony Gold. The stock trades about -0.06 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Harmony Gold Mining on November 27, 2024 and sell it today you would earn a total of 251.00 from holding Harmony Gold Mining or generate 26.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertiv Holdings Co vs. Harmony Gold Mining
Performance |
| Timeline |
| Vertiv Holdings |
| Harmony Gold Mining |
Vertiv Holdings and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Harmony Gold
The main advantage of trading using opposite Vertiv Holdings and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings 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.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Harmony Gold vs. The Joint Corp | Harmony Gold vs. Integral Ad Science | Harmony Gold vs. Magnite | Harmony Gold vs. Fluent 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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