Correlation Between Hawkins and DRDGOLD Limited
Can any of the company-specific risk be diversified away by investing in both Hawkins and DRDGOLD Limited 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 Hawkins and DRDGOLD Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and DRDGOLD Limited ADR, you can compare the effects of market volatilities on Hawkins and DRDGOLD Limited 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 Hawkins with a short position of DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and DRDGOLD Limited.
Diversification Opportunities for Hawkins and DRDGOLD Limited
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawkins and DRDGOLD is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR and Hawkins 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 Hawkins are associated (or correlated) with DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Hawkins i.e., Hawkins and DRDGOLD Limited go up and down completely randomly.
Pair Corralation between Hawkins and DRDGOLD Limited
Given the investment horizon of 90 days Hawkins is expected to under-perform the DRDGOLD Limited. But the stock apears to be less risky and, when comparing its historical volatility, Hawkins is 1.45 times less risky than DRDGOLD Limited. The stock trades about -0.15 of its potential returns per unit of risk. The DRDGOLD Limited ADR is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,957 in DRDGOLD Limited ADR on August 31, 2025 and sell it today you would earn a total of 1,061 from holding DRDGOLD Limited ADR or generate 54.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. DRDGOLD Limited ADR
Performance |
| Timeline |
| Hawkins |
| DRDGOLD Limited ADR |
Hawkins and DRDGOLD Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and DRDGOLD Limited
The main advantage of trading using opposite Hawkins and DRDGOLD Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins position performs unexpectedly, DRDGOLD Limited 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 DRDGOLD Limited will offset losses from the drop in DRDGOLD Limited's long position.| Hawkins vs. RTG Mining | Hawkins vs. Sumitomo Chemical Co | Hawkins vs. Park Electrochemical | Hawkins vs. China Petroleum Chemical |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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