Correlation Between Harmony Gold and Biogen
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Biogen 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 Biogen 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 Biogen Inc, you can compare the effects of market volatilities on Harmony Gold and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Biogen.
Diversification Opportunities for Harmony Gold and Biogen
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Biogen is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Biogen go up and down completely randomly.
Pair Corralation between Harmony Gold and Biogen
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.38 times more return on investment than Biogen. However, Harmony Gold is 2.38 times more volatile than Biogen Inc. It trades about 0.0 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.18 per unit of risk. If you would invest 914.00 in Harmony Gold Mining on August 25, 2024 and sell it today you would lose (19.00) from holding Harmony Gold Mining or give up 2.08% 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. Biogen Inc
Performance |
| Timeline |
| Harmony Gold Mining |
| Biogen Inc |
Harmony Gold and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Biogen
The main advantage of trading using opposite Harmony Gold and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Harmony Gold vs. The Boston Beer | Harmony Gold vs. NorAm Drilling AS | Harmony Gold vs. BORR DRILLING NEW | Harmony Gold vs. THAI BEVERAGE |
| Biogen vs. EIDESVIK OFFSHORE NK | Biogen vs. Suntory Beverage Food | Biogen vs. GREENX METALS LTD | Biogen vs. Harmony Gold Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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