Correlation Between Ascendis Health and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Ascendis Health 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 Ascendis Health and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Harmony Gold Mining, you can compare the effects of market volatilities on Ascendis Health 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 Ascendis Health with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Harmony Gold.
Diversification Opportunities for Ascendis Health and Harmony Gold
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ascendis and Harmony is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health 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 Ascendis Health 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 Ascendis Health 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 Ascendis Health i.e., Ascendis Health and Harmony Gold go up and down completely randomly.
Pair Corralation between Ascendis Health and Harmony Gold
Assuming the 90 days trading horizon Ascendis Health is expected to generate 2.06 times less return on investment than Harmony Gold. In addition to that, Ascendis Health is 1.04 times more volatile than Harmony Gold Mining. It trades about 0.04 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 per unit of volatility. If you would invest 615,000 in Harmony Gold Mining on September 24, 2024 and sell it today you would earn a total of 962,200 from holding Harmony Gold Mining or generate 156.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ascendis Health vs. Harmony Gold Mining
Performance |
Timeline |
Ascendis Health |
Harmony Gold Mining |
Ascendis Health and Harmony Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ascendis Health and Harmony Gold
The main advantage of trading using opposite Ascendis Health and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health 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.Ascendis Health vs. Aspen Pharmacare Holdings | Ascendis Health vs. Adcock Ingram Holdings | Ascendis Health vs. Brait SE | Ascendis Health vs. Thungela Resources Limited |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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