Correlation Between Lion One and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Harmony Gold Mining, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Harmony Gold.
Diversification Opportunities for Lion One and Harmony Gold
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Harmony is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Harmony Gold go up and down completely randomly.
Pair Corralation between Lion One and Harmony Gold
If you would invest 950.00 in Harmony Gold Mining on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Harmony Gold Mining or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lion One Metals vs. Harmony Gold Mining
Performance |
Timeline |
Lion One Metals |
Harmony Gold Mining |
Lion One and Harmony Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion One and Harmony Gold
The main advantage of trading using opposite Lion One and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
Harmony Gold vs. Lion One Metals | Harmony Gold vs. Westhaven Gold Corp | Harmony Gold vs. Satori Resources | Harmony Gold vs. Wesdome Gold Mines |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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