Correlation Between Harmony Gold and AIB Group
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and AIB Group 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 AIB Group 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 AIB Group plc, you can compare the effects of market volatilities on Harmony Gold and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and AIB Group.
Diversification Opportunities for Harmony Gold and AIB Group
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and AIB is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of Harmony Gold i.e., Harmony Gold and AIB Group go up and down completely randomly.
Pair Corralation between Harmony Gold and AIB Group
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.77 times more return on investment than AIB Group. However, Harmony Gold is 1.77 times more volatile than AIB Group plc. It trades about 0.04 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.06 per unit of risk. If you would invest 775.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 90.00 from holding Harmony Gold Mining or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. AIB Group plc
Performance |
| Timeline |
| Harmony Gold Mining |
| AIB Group plc |
Harmony Gold and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and AIB Group
The main advantage of trading using opposite Harmony Gold and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
| AIB Group vs. Regions Financial | AIB Group vs. JSC Halyk bank | AIB Group vs. Harmony Gold Mining | AIB Group vs. ELMOS SEMICONDUCTOR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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