Correlation Between SLR Investment and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both SLR Investment 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 SLR Investment and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Harmony Gold Mining, you can compare the effects of market volatilities on SLR Investment 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 SLR Investment with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Harmony Gold.
Diversification Opportunities for SLR Investment and Harmony Gold
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLR and Harmony is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp 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 SLR Investment 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 SLR Investment Corp 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 SLR Investment i.e., SLR Investment and Harmony Gold go up and down completely randomly.
Pair Corralation between SLR Investment and Harmony Gold
Assuming the 90 days horizon SLR Investment is expected to generate 19.02 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, SLR Investment Corp is 3.25 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 0.58 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Harmony Gold Mining on November 7, 2024 and sell it today you would earn a total of 305.00 from holding Harmony Gold Mining or generate 38.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| SLR Investment Corp |
| Harmony Gold Mining |
SLR Investment and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Harmony Gold
The main advantage of trading using opposite SLR Investment and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment 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.| SLR Investment vs. Playtech plc | SLR Investment vs. Boyd Gaming | SLR Investment vs. BioNTech SE | SLR Investment vs. PENN NATL GAMING |
| Harmony Gold vs. SK TELECOM TDADR | Harmony Gold vs. COMBA TELECOM SYST | Harmony Gold vs. Comba Telecom Systems | Harmony Gold vs. QBE Insurance Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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