Correlation Between SPAREBK 1 and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both SPAREBK 1 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 SPAREBK 1 and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPAREBK 1 NORD NORGE and Harmony Gold Mining, you can compare the effects of market volatilities on SPAREBK 1 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 SPAREBK 1 with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPAREBK 1 and Harmony Gold.
Diversification Opportunities for SPAREBK 1 and Harmony Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPAREBK and Harmony is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SPAREBK 1 NORD NORGE 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 SPAREBK 1 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 SPAREBK 1 NORD NORGE 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 SPAREBK 1 i.e., SPAREBK 1 and Harmony Gold go up and down completely randomly.
Pair Corralation between SPAREBK 1 and Harmony Gold
Assuming the 90 days horizon SPAREBK 1 NORD NORGE is expected to generate 0.44 times more return on investment than Harmony Gold. However, SPAREBK 1 NORD NORGE is 2.3 times less risky than Harmony Gold. It trades about 0.23 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.12 per unit of risk. If you would invest 1,000.00 in SPAREBK 1 NORD NORGE on October 9, 2024 and sell it today you would earn a total of 47.00 from holding SPAREBK 1 NORD NORGE or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
SPAREBK 1 NORD NORGE vs. Harmony Gold Mining
Performance |
| Timeline |
| SPAREBK 1 NORD |
| Harmony Gold Mining |
SPAREBK 1 and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPAREBK 1 and Harmony Gold
The main advantage of trading using opposite SPAREBK 1 and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPAREBK 1 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.| SPAREBK 1 vs. URBAN OUTFITTERS | SPAREBK 1 vs. American Eagle Outfitters | SPAREBK 1 vs. FLOW TRADERS LTD | SPAREBK 1 vs. SOFI TECHNOLOGIES |
| Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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