Correlation Between Harmony Gold and Octodec
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Octodec 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 Octodec 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 Octodec, you can compare the effects of market volatilities on Harmony Gold and Octodec 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 Octodec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Octodec.
Diversification Opportunities for Harmony Gold and Octodec
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Octodec is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Octodec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octodec 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 Octodec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octodec has no effect on the direction of Harmony Gold i.e., Harmony Gold and Octodec go up and down completely randomly.
Pair Corralation between Harmony Gold and Octodec
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Octodec. In addition to that, Harmony Gold is 2.04 times more volatile than Octodec. It trades about -0.09 of its total potential returns per unit of risk. Octodec is currently generating about 0.08 per unit of volatility. If you would invest 113,111 in Octodec on October 10, 2024 and sell it today you would earn a total of 1,689 from holding Octodec or generate 1.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Octodec
Performance |
Timeline |
Harmony Gold Mining |
Octodec |
Harmony Gold and Octodec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Octodec
The main advantage of trading using opposite Harmony Gold and Octodec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Octodec 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 Octodec will offset losses from the drop in Octodec's long position.Harmony Gold vs. Deneb Investments | Harmony Gold vs. HomeChoice Investments | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Frontier Transport Holdings |
Octodec vs. Astoria Investments | Octodec vs. Harmony Gold Mining | Octodec vs. Ascendis Health | Octodec vs. HomeChoice Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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