Correlation Between Harmony Gold and ING Groep
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and ING Groep 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 ING Groep 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 ING Groep NV, you can compare the effects of market volatilities on Harmony Gold and ING Groep 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 ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and ING Groep.
Diversification Opportunities for Harmony Gold and ING Groep
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and ING is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Harmony Gold i.e., Harmony Gold and ING Groep go up and down completely randomly.
Pair Corralation between Harmony Gold and ING Groep
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.63 times more return on investment than ING Groep. However, Harmony Gold is 2.63 times more volatile than ING Groep NV. It trades about 0.1 of its potential returns per unit of risk. ING Groep NV is currently generating about 0.06 per unit of risk. If you would invest 380.00 in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of 470.00 from holding Harmony Gold Mining or generate 123.68% 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. ING Groep NV
Performance |
| Timeline |
| Harmony Gold Mining |
| ING Groep NV |
Harmony Gold and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and ING Groep
The main advantage of trading using opposite Harmony Gold and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| ING Groep vs. MACOM Technology Solutions | ING Groep vs. Western Copper and | ING Groep vs. Sunny Optical Technology | ING Groep vs. LION ONE METALS |
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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