Correlation Between Harmony Gold and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on Harmony Gold and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Insurance Australia.
Diversification Opportunities for Harmony Gold and Insurance Australia
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Insurance is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Harmony Gold i.e., Harmony Gold and Insurance Australia go up and down completely randomly.
Pair Corralation between Harmony Gold and Insurance Australia
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Insurance Australia. In addition to that, Harmony Gold is 1.23 times more volatile than Insurance Australia Group. It trades about -0.19 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about -0.02 per unit of volatility. If you would invest 500.00 in Insurance Australia Group on September 25, 2024 and sell it today you would lose (4.00) from holding Insurance Australia Group or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Insurance Australia Group
Performance |
| Timeline |
| Harmony Gold Mining |
| Insurance Australia |
Harmony Gold and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Insurance Australia
The main advantage of trading using opposite Harmony Gold and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Franco Nevada |
| Insurance Australia vs. CN MODERN DAIRY | Insurance Australia vs. Ross Stores | Insurance Australia vs. Caseys General Stores | Insurance Australia vs. Tyson Foods |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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