Correlation Between Harmony Gold and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sumitomo Mitsui 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 Sumitomo Mitsui 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 Sumitomo Mitsui Construction, you can compare the effects of market volatilities on Harmony Gold and Sumitomo Mitsui 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 Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sumitomo Mitsui.
Diversification Opportunities for Harmony Gold and Sumitomo Mitsui
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Sumitomo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons 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 Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Cons has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Harmony Gold and Sumitomo Mitsui
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Sumitomo Mitsui. In addition to that, Harmony Gold is 1.8 times more volatile than Sumitomo Mitsui Construction. It trades about -0.23 of its total potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about -0.16 per unit of volatility. If you would invest 232.00 in Sumitomo Mitsui Construction on August 24, 2024 and sell it today you would lose (14.00) from holding Sumitomo Mitsui Construction or give up 6.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| Harmony Gold Mining |
| Sumitomo Mitsui Cons |
Harmony Gold and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sumitomo Mitsui
The main advantage of trading using opposite Harmony Gold and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Agnico Eagle Mines | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| Sumitomo Mitsui vs. Goosehead Insurance | Sumitomo Mitsui vs. MCEWEN MINING INC | Sumitomo Mitsui vs. United Insurance Holdings | Sumitomo Mitsui vs. Safety Insurance Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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