Correlation Between Harmony Gold and National Retail
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and National Retail 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 National Retail 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 National Retail Properties, you can compare the effects of market volatilities on Harmony Gold and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and National Retail.
Diversification Opportunities for Harmony Gold and National Retail
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and National is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Harmony Gold i.e., Harmony Gold and National Retail go up and down completely randomly.
Pair Corralation between Harmony Gold and National Retail
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.71 times more return on investment than National Retail. However, Harmony Gold is 2.71 times more volatile than National Retail Properties. It trades about 0.06 of its potential returns per unit of risk. National Retail Properties is currently generating about 0.04 per unit of risk. If you would invest 531.00 in Harmony Gold Mining on September 23, 2024 and sell it today you would earn a total of 259.00 from holding Harmony Gold Mining or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. National Retail Properties
Performance |
| Timeline |
| Harmony Gold Mining |
| National Retail Prop |
Harmony Gold and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and National Retail
The main advantage of trading using opposite Harmony Gold and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Franco Nevada |
| National Retail vs. Harmony Gold Mining | National Retail vs. CeoTronics AG | National Retail vs. GALENA MINING LTD | National Retail vs. Axcelis Technologies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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