Correlation Between Zoom Video and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Zoom Video 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 Zoom Video and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zoom Video Communications and Harmony Gold Mining, you can compare the effects of market volatilities on Zoom Video 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 Zoom Video with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Harmony Gold.
Diversification Opportunities for Zoom Video and Harmony Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zoom and Harmony is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications 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 Zoom Video 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 Zoom Video Communications 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 Zoom Video i.e., Zoom Video and Harmony Gold go up and down completely randomly.
Pair Corralation between Zoom Video and Harmony Gold
Allowing for the 90-day total investment horizon Zoom Video Communications is expected to generate 0.51 times more return on investment than Harmony Gold. However, Zoom Video Communications is 1.97 times less risky than Harmony Gold. It trades about 0.35 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.21 per unit of risk. If you would invest 7,263 in Zoom Video Communications on August 26, 2024 and sell it today you would earn a total of 1,325 from holding Zoom Video Communications or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Harmony Gold Mining
Performance |
| Timeline |
| Zoom Video Communications |
| Harmony Gold Mining |
Zoom Video and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Harmony Gold
The main advantage of trading using opposite Zoom Video and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video 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.The idea behind Zoom Video Communications and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Harmony Gold vs. Zoom Video Communications | Harmony Gold vs. Summit Environmental | Harmony Gold vs. Sanyo Special Steel | Harmony Gold vs. United States Steel |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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