Correlation Between Harmony Gold and Visa
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Visa 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 Harmony Gold and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Gold Mining and Visa Inc, you can compare the effects of market volatilities on Harmony Gold and Visa 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 Harmony Gold with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Visa.
Diversification Opportunities for Harmony Gold and Visa
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harmony and Visa is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc and Harmony Gold 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 Harmony Gold Mining are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Visa go up and down completely randomly.
Pair Corralation between Harmony Gold and Visa
Assuming the 90 days horizon Harmony Gold is expected to generate 1.64 times less return on investment than Visa. In addition to that, Harmony Gold is 3.05 times more volatile than Visa Inc. It trades about 0.06 of its total potential returns per unit of risk. Visa Inc is currently generating about 0.29 per unit of volatility. If you would invest 29,760 in Visa Inc on December 3, 2024 and sell it today you would earn a total of 5,110 from holding Visa Inc or generate 17.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Visa Inc
Performance |
Timeline |
Harmony Gold Mining |
Visa Inc |
Harmony Gold and Visa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Visa
The main advantage of trading using opposite Harmony Gold and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.Harmony Gold vs. Cass Information Systems | Harmony Gold vs. RYU Apparel | Harmony Gold vs. MICRONIC MYDATA | Harmony Gold vs. Datalogic SpA |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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