Correlation Between Banco Patagonia and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Banco Patagonia 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 Banco Patagonia and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Patagonia and Harmony Gold Mining, you can compare the effects of market volatilities on Banco Patagonia 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 Banco Patagonia with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Patagonia and Harmony Gold.
Diversification Opportunities for Banco Patagonia and Harmony Gold
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Banco and Harmony is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Banco Patagonia 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 Banco Patagonia 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 Banco Patagonia 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 Banco Patagonia i.e., Banco Patagonia and Harmony Gold go up and down completely randomly.
Pair Corralation between Banco Patagonia and Harmony Gold
Assuming the 90 days trading horizon Banco Patagonia is expected to generate 1.12 times more return on investment than Harmony Gold. However, Banco Patagonia is 1.12 times more volatile than Harmony Gold Mining. It trades about 0.17 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.14 per unit of risk. If you would invest 11,044 in Banco Patagonia on September 13, 2024 and sell it today you would earn a total of 238,956 from holding Banco Patagonia or generate 2163.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Banco Patagonia vs. Harmony Gold Mining
Performance |
| Timeline |
| Banco Patagonia |
| Harmony Gold Mining |
Banco Patagonia and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Patagonia and Harmony Gold
The main advantage of trading using opposite Banco Patagonia and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Patagonia 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.| Banco Patagonia vs. Transportadora de Gas | Banco Patagonia vs. Compania de Transporte | Banco Patagonia vs. Harmony Gold Mining | Banco Patagonia vs. Agrometal SAI |
| Harmony Gold vs. Edesa Holding SA | Harmony Gold vs. Vista Energy, SAB | Harmony Gold vs. United States Steel | Harmony Gold vs. Pfizer Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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