Correlation Between Harmony Gold and Getty Images
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Getty Images 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 Getty Images 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 Getty Images Holdings, you can compare the effects of market volatilities on Harmony Gold and Getty Images 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 Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Getty Images.
Diversification Opportunities for Harmony Gold and Getty Images
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Getty is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and Getty Images go up and down completely randomly.
Pair Corralation between Harmony Gold and Getty Images
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.85 times more return on investment than Getty Images. However, Harmony Gold is 1.85 times more volatile than Getty Images Holdings. It trades about 0.22 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.25 per unit of risk. If you would invest 949.00 in Harmony Gold Mining on December 2, 2024 and sell it today you would earn a total of 251.00 from holding Harmony Gold Mining or generate 26.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Getty Images Holdings
Performance |
Timeline |
Harmony Gold Mining |
Getty Images Holdings |
Harmony Gold and Getty Images Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Getty Images
The main advantage of trading using opposite Harmony Gold and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.Harmony Gold vs. Lululemon Athletica | Harmony Gold vs. Asbury Automotive Group | Harmony Gold vs. Genuine Parts Co | Harmony Gold vs. Aspen Technology |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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