Correlation Between X FAB and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Harmony Gold Mining, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Harmony Gold.
Diversification Opportunities for X FAB and Harmony Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between XFB and Harmony is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Harmony Gold go up and down completely randomly.
Pair Corralation between X FAB and Harmony Gold
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 0.94 times more return on investment than Harmony Gold. However, X FAB Silicon Foundries is 1.06 times less risky than Harmony Gold. It trades about 0.19 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.04 per unit of risk. If you would invest 446.00 in X FAB Silicon Foundries on September 13, 2024 and sell it today you would earn a total of 48.00 from holding X FAB Silicon Foundries or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Harmony Gold Mining
Performance |
| Timeline |
| X FAB Silicon |
| Harmony Gold Mining |
X FAB and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Harmony Gold
The main advantage of trading using opposite X FAB and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. Highlight Communications AG | X FAB vs. Transportadora de Gas | X FAB vs. Global Ship Lease | X FAB vs. USWE SPORTS AB |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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