Correlation Between Harmony Gold and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Fifth Third 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 Fifth Third 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 Fifth Third Bancorp, you can compare the effects of market volatilities on Harmony Gold and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Fifth Third.
Diversification Opportunities for Harmony Gold and Fifth Third
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Fifth is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Fifth Third go up and down completely randomly.
Pair Corralation between Harmony Gold and Fifth Third
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.69 times more return on investment than Fifth Third. However, Harmony Gold is 1.69 times more volatile than Fifth Third Bancorp. It trades about 0.6 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.15 per unit of risk. If you would invest 795.00 in Harmony Gold Mining on November 5, 2024 and sell it today you would earn a total of 275.00 from holding Harmony Gold Mining or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Fifth Third Bancorp
Performance |
| Timeline |
| Harmony Gold Mining |
| Fifth Third Bancorp |
Harmony Gold and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Fifth Third
The main advantage of trading using opposite Harmony Gold and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Harmony Gold vs. TITAN MACHINERY | Harmony Gold vs. Dairy Farm International | Harmony Gold vs. AOYAMA TRADING | Harmony Gold vs. SEI INVESTMENTS |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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