Correlation Between Weibo Corp and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Weibo Corp 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 Weibo Corp and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Harmony Gold Mining, you can compare the effects of market volatilities on Weibo Corp 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 Weibo Corp with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Harmony Gold.
Diversification Opportunities for Weibo Corp and Harmony Gold
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weibo and Harmony is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp 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 Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Harmony Gold go up and down completely randomly.
Pair Corralation between Weibo Corp and Harmony Gold
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.86 times more return on investment than Harmony Gold. However, Weibo Corp is 1.17 times less risky than Harmony Gold. It trades about -0.05 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.23 per unit of risk. If you would invest 959.00 in Weibo Corp on August 28, 2024 and sell it today you would lose (38.00) from holding Weibo Corp or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Weibo Corp |
| Harmony Gold Mining |
Weibo Corp and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Harmony Gold
The main advantage of trading using opposite Weibo Corp and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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.| Weibo Corp vs. Alphabet Inc Class C | Weibo Corp vs. Twilio Inc | Weibo Corp vs. Snap Inc | Weibo Corp vs. Baidu 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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