Correlation Between Harmony Gold and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Cal-Maine Foods 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 Cal-Maine Foods 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 Cal Maine Foods, you can compare the effects of market volatilities on Harmony Gold and Cal-Maine Foods 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 Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Cal-Maine Foods.
Diversification Opportunities for Harmony Gold and Cal-Maine Foods
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Cal-Maine is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal-Maine Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Harmony Gold i.e., Harmony Gold and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between Harmony Gold and Cal-Maine Foods
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.88 times more return on investment than Cal-Maine Foods. However, Harmony Gold Mining is 1.14 times less risky than Cal-Maine Foods. It trades about 0.23 of its potential returns per unit of risk. Cal Maine Foods is currently generating about -0.03 per unit of risk. If you would invest 780.00 in Harmony Gold Mining on December 28, 2024 and sell it today you would earn a total of 370.00 from holding Harmony Gold Mining or generate 47.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Cal Maine Foods
Performance |
Timeline |
Harmony Gold Mining |
Cal Maine Foods |
Harmony Gold and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Cal-Maine Foods
The main advantage of trading using opposite Harmony Gold and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Cal-Maine Foods 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 Cal-Maine Foods will offset losses from the drop in Cal-Maine Foods' long position.Harmony Gold vs. MEDICAL FACILITIES NEW | Harmony Gold vs. USWE SPORTS AB | Harmony Gold vs. NTG Nordic Transport | Harmony Gold vs. MeVis Medical Solutions |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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