Correlation Between Zeder Investments and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Zeder Investments 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 Zeder Investments and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeder Investments and Harmony Gold Mining, you can compare the effects of market volatilities on Zeder Investments 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 Zeder Investments with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeder Investments and Harmony Gold.
Diversification Opportunities for Zeder Investments and Harmony Gold
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zeder and Harmony is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments 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 Zeder Investments 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 Zeder Investments 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 Zeder Investments i.e., Zeder Investments and Harmony Gold go up and down completely randomly.
Pair Corralation between Zeder Investments and Harmony Gold
Assuming the 90 days trading horizon Zeder Investments is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Zeder Investments is 1.66 times less risky than Harmony Gold. The stock trades about -0.31 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,577,200 in Harmony Gold Mining on October 21, 2024 and sell it today you would earn a total of 265,800 from holding Harmony Gold Mining or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zeder Investments vs. Harmony Gold Mining
Performance |
| Timeline |
| Zeder Investments |
| Harmony Gold Mining |
Zeder Investments and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeder Investments and Harmony Gold
The main advantage of trading using opposite Zeder Investments and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeder Investments 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.| Zeder Investments vs. Harmony Gold Mining | Zeder Investments vs. Trematon Capital Investments | Zeder Investments vs. Kap Industrial Holdings | Zeder Investments vs. Kumba Iron Ore |
| Harmony Gold vs. CA Sales Holdings | Harmony Gold vs. Brimstone Investment | Harmony Gold vs. Deneb Investments | Harmony Gold vs. Datatec |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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