Correlation Between CarsalesCom and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both CarsalesCom 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 CarsalesCom and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Harmony Gold Mining, you can compare the effects of market volatilities on CarsalesCom 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 CarsalesCom with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and Harmony Gold.
Diversification Opportunities for CarsalesCom and Harmony Gold
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CarsalesCom and Harmony is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom 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 CarsalesCom 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 CarsalesCom 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 CarsalesCom i.e., CarsalesCom and Harmony Gold go up and down completely randomly.
Pair Corralation between CarsalesCom and Harmony Gold
Assuming the 90 days horizon CarsalesCom is expected to generate 2.07 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, CarsalesCom is 2.11 times less risky than Harmony Gold. It trades about 0.1 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 372.00 in Harmony Gold Mining on August 29, 2024 and sell it today you would earn a total of 488.00 from holding Harmony Gold Mining or generate 131.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Harmony Gold Mining
Performance |
| Timeline |
| CarsalesCom |
| Harmony Gold Mining |
CarsalesCom and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and Harmony Gold
The main advantage of trading using opposite CarsalesCom and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom 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.| CarsalesCom vs. AM EAGLE OUTFITTERS | CarsalesCom vs. RYU Apparel | CarsalesCom vs. Cal Maine Foods | CarsalesCom vs. SCIENCE IN SPORT |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |