Correlation Between Hertz Global and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Hertz Global 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 Hertz Global and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Hldgs and Harmony Gold Mining, you can compare the effects of market volatilities on Hertz Global 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 Hertz Global with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Harmony Gold.
Diversification Opportunities for Hertz Global and Harmony Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Harmony is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Hldgs 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 Hertz Global 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 Hertz Global Hldgs 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 Hertz Global i.e., Hertz Global and Harmony Gold go up and down completely randomly.
Pair Corralation between Hertz Global and Harmony Gold
Assuming the 90 days horizon Hertz Global Hldgs is expected to under-perform the Harmony Gold. In addition to that, Hertz Global is 1.89 times more volatile than Harmony Gold Mining. It trades about -0.18 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.17 per unit of volatility. If you would invest 929.00 in Harmony Gold Mining on October 11, 2024 and sell it today you would lose (68.00) from holding Harmony Gold Mining or give up 7.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hertz Global Hldgs vs. Harmony Gold Mining
Performance |
Timeline |
Hertz Global Hldgs |
Harmony Gold Mining |
Hertz Global and Harmony Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hertz Global and Harmony Gold
The main advantage of trading using opposite Hertz Global and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global 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.Hertz Global vs. Hertz Global Holdings | Hertz Global vs. Avis Budget Group | Hertz Global vs. Herc Holdings | Hertz Global vs. Frontier Group Holdings |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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