Correlation Between Harmony Gold and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on Harmony Gold and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and BRIT AMER.
Diversification Opportunities for Harmony Gold and BRIT AMER
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and BRIT is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of Harmony Gold i.e., Harmony Gold and BRIT AMER go up and down completely randomly.
Pair Corralation between Harmony Gold and BRIT AMER
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.94 times more return on investment than BRIT AMER. However, Harmony Gold is 2.94 times more volatile than BRIT AMER TOBACCO. It trades about 0.08 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.01 per unit of risk. If you would invest 324.00 in Harmony Gold Mining on August 28, 2024 and sell it today you would earn a total of 606.00 from holding Harmony Gold Mining or generate 187.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| Harmony Gold Mining |
| BRIT AMER TOBACCO |
Harmony Gold and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and BRIT AMER
The main advantage of trading using opposite Harmony Gold and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER'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 |
| BRIT AMER vs. USWE SPORTS AB | BRIT AMER vs. Selective Insurance Group | BRIT AMER vs. United Insurance Holdings | BRIT AMER vs. ANTA SPORTS PRODUCT |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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