Correlation Between COSTCO WHOLESALE and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE 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 COSTCO WHOLESALE and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSTCO WHOLESALE CDR and Harmony Gold Mining, you can compare the effects of market volatilities on COSTCO WHOLESALE 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 COSTCO WHOLESALE with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and Harmony Gold.
Diversification Opportunities for COSTCO WHOLESALE and Harmony Gold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COSTCO and Harmony is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE 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 COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Harmony Gold go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and Harmony Gold
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.43 times more return on investment than Harmony Gold. However, COSTCO WHOLESALE CDR is 2.31 times less risky than Harmony Gold. It trades about -0.04 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.04 per unit of risk. If you would invest 2,796 in COSTCO WHOLESALE CDR on April 24, 2025 and sell it today you would lose (116.00) from holding COSTCO WHOLESALE CDR or give up 4.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
COSTCO WHOLESALE CDR vs. Harmony Gold Mining
Performance |
Timeline |
COSTCO WHOLESALE CDR |
Harmony Gold Mining |
COSTCO WHOLESALE and Harmony Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COSTCO WHOLESALE and Harmony Gold
The main advantage of trading using opposite COSTCO WHOLESALE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE 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.COSTCO WHOLESALE vs. Semiconductor Manufacturing International | COSTCO WHOLESALE vs. Strong Petrochemical Holdings | COSTCO WHOLESALE vs. SILICON LABORATOR | COSTCO WHOLESALE vs. Tower Semiconductor |
Harmony Gold vs. Bio Techne Corp | Harmony Gold vs. PKSHA TECHNOLOGY INC | Harmony Gold vs. Rogers Communications | Harmony Gold vs. NetSol Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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