Correlation Between CALTAGIRONE EDITORE and Harmony Gold

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Can any of the company-specific risk be diversified away by investing in both CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CALTAGIRONE EDITORE and Harmony Gold Mining, you can compare the effects of market volatilities on CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CALTAGIRONE EDITORE and Harmony Gold.

Diversification Opportunities for CALTAGIRONE EDITORE and Harmony Gold

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between CALTAGIRONE and Harmony is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE i.e., CALTAGIRONE EDITORE and Harmony Gold go up and down completely randomly.

Pair Corralation between CALTAGIRONE EDITORE and Harmony Gold

Assuming the 90 days trading horizon CALTAGIRONE EDITORE is expected to generate 0.55 times more return on investment than Harmony Gold. However, CALTAGIRONE EDITORE is 1.82 times less risky than Harmony Gold. It trades about 0.12 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.0 per unit of risk. If you would invest  117.00  in CALTAGIRONE EDITORE on October 8, 2024 and sell it today you would earn a total of  15.00  from holding CALTAGIRONE EDITORE or generate 12.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CALTAGIRONE EDITORE  vs.  Harmony Gold Mining

 Performance 
       Timeline  
CALTAGIRONE EDITORE 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CALTAGIRONE EDITORE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CALTAGIRONE EDITORE unveiled solid returns over the last few months and may actually be approaching a breakup point.
Harmony Gold Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CALTAGIRONE EDITORE and Harmony Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CALTAGIRONE EDITORE and Harmony Gold

The main advantage of trading using opposite CALTAGIRONE EDITORE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE 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.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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