Correlation Between Harmony Gold and Anheuser-Busch InBev
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Anheuser-Busch InBev 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 Anheuser-Busch InBev 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 Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Harmony Gold and Anheuser-Busch InBev 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 Anheuser-Busch InBev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Anheuser-Busch InBev.
Diversification Opportunities for Harmony Gold and Anheuser-Busch InBev
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Anheuser-Busch is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev 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 Anheuser-Busch InBev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of Harmony Gold i.e., Harmony Gold and Anheuser-Busch InBev go up and down completely randomly.
Pair Corralation between Harmony Gold and Anheuser-Busch InBev
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.44 times more return on investment than Anheuser-Busch InBev. However, Harmony Gold is 2.44 times more volatile than Anheuser Busch InBev SANV. It trades about -0.07 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.23 per unit of risk. If you would invest 865.00 in Harmony Gold Mining on October 12, 2024 and sell it today you would lose (35.00) from holding Harmony Gold Mining or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Harmony Gold Mining vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| Harmony Gold Mining |
| Anheuser Busch InBev |
Harmony Gold and Anheuser-Busch InBev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Anheuser-Busch InBev
The main advantage of trading using opposite Harmony Gold and Anheuser-Busch InBev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Anheuser-Busch InBev 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 Anheuser-Busch InBev will offset losses from the drop in Anheuser-Busch InBev's long position.| Harmony Gold vs. FIREWEED METALS P | Harmony Gold vs. Air Transport Services | Harmony Gold vs. Calibre Mining Corp | Harmony Gold vs. Perseus Mining Limited |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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