Correlation Between Daily Journal and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both Daily Journal 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 Daily Journal and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daily Journal Corp and Harmony Gold Mining, you can compare the effects of market volatilities on Daily Journal 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 Daily Journal with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Harmony Gold.

Diversification Opportunities for Daily Journal and Harmony Gold

-0.31

Correlation Coefficient

Daily Journal  Harmony Gold

Very good diversification

The 3 months correlation between Daily and Harmony is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp 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 Daily Journal 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 Daily Journal Corp 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 Daily Journal i.e., Daily Journal and Harmony Gold go up and down completely randomly.

Pair Corralation between Daily Journal and Harmony Gold

Given the investment horizon of 90 days Daily Journal is expected to generate 2.06 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Daily Journal Corp is 1.74 times less risky than Harmony Gold. It trades about 0.08 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  375.00  in Harmony Gold Mining on September 24, 2024 and sell it today you would earn a total of  575.00  from holding Harmony Gold Mining or generate 153.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.73%
Values	Daily Returns

Daily Journal Corp  vs.  Harmony Gold Mining

Daily Journal Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Daily Journal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Harmony Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Daily Journal and Harmony Gold

The main advantage of trading using opposite Daily Journal and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal 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.

The idea behind Daily Journal Corp and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.