Correlation Between Corporate Office and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Corporate Office 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 Corporate Office and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and Harmony Gold Mining, you can compare the effects of market volatilities on Corporate Office 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 Corporate Office with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Harmony Gold.
Diversification Opportunities for Corporate Office and Harmony Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and Harmony is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties 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 Corporate Office 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 Corporate Office Properties 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 Corporate Office i.e., Corporate Office and Harmony Gold go up and down completely randomly.
Pair Corralation between Corporate Office and Harmony Gold
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.4 times more return on investment than Harmony Gold. However, Corporate Office Properties is 2.52 times less risky than Harmony Gold. It trades about 0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.08 per unit of risk. If you would invest 2,980 in Corporate Office Properties on August 28, 2024 and sell it today you would earn a total of 60.00 from holding Corporate Office Properties or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. Harmony Gold Mining
Performance |
| Timeline |
| Corporate Office Pro |
| Harmony Gold Mining |
Corporate Office and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Harmony Gold
The main advantage of trading using opposite Corporate Office and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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.| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Agnico Eagle Mines | 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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