Correlation Between Harmony Gold and John Wiley
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and John Wiley 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 John Wiley 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 John Wiley Sons, you can compare the effects of market volatilities on Harmony Gold and John Wiley 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 John Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and John Wiley.
Diversification Opportunities for Harmony Gold and John Wiley
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and John is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and John Wiley Sons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wiley Sons 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 John Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wiley Sons has no effect on the direction of Harmony Gold i.e., Harmony Gold and John Wiley go up and down completely randomly.
Pair Corralation between Harmony Gold and John Wiley
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.95 times more return on investment than John Wiley. However, Harmony Gold is 1.95 times more volatile than John Wiley Sons. It trades about -0.02 of its potential returns per unit of risk. John Wiley Sons is currently generating about -0.04 per unit of risk. If you would invest 1,033 in Harmony Gold Mining on September 25, 2024 and sell it today you would lose (83.00) from holding Harmony Gold Mining or give up 8.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 77.05% |
Values | Daily Returns |
Harmony Gold Mining vs. John Wiley Sons
Performance |
Timeline |
Harmony Gold Mining |
John Wiley Sons |
Harmony Gold and John Wiley Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and John Wiley
The main advantage of trading using opposite Harmony Gold and John Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, John Wiley 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 John Wiley will offset losses from the drop in John Wiley's long position.Harmony Gold vs. Lion One Metals | Harmony Gold vs. Westhaven Gold Corp | Harmony Gold vs. Satori Resources | Harmony Gold vs. Wesdome Gold Mines |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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