Correlation Between Harmony Gold and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on Harmony Gold and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and IMPERIAL TOBACCO.
Diversification Opportunities for Harmony Gold and IMPERIAL TOBACCO
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and IMPERIAL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Harmony Gold i.e., Harmony Gold and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Harmony Gold and IMPERIAL TOBACCO
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the IMPERIAL TOBACCO. In addition to that, Harmony Gold is 2.62 times more volatile than IMPERIAL TOBACCO . It trades about -0.21 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.3 per unit of volatility. If you would invest 2,711 in IMPERIAL TOBACCO on September 19, 2024 and sell it today you would earn a total of 386.00 from holding IMPERIAL TOBACCO or generate 14.24% 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. IMPERIAL TOBACCO
Performance |
| Timeline |
| Harmony Gold Mining |
| IMPERIAL TOBACCO |
Harmony Gold and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and IMPERIAL TOBACCO
The main advantage of trading using opposite Harmony Gold and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA | Harmony Gold vs. Reliance Steel Aluminum |
| IMPERIAL TOBACCO vs. Evolution Mining Limited | IMPERIAL TOBACCO vs. Harmony Gold Mining | IMPERIAL TOBACCO vs. ADRIATIC METALS LS 013355 | IMPERIAL TOBACCO vs. Aegean Airlines SA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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