Correlation Between Harmony Gold and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on Harmony Gold and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and NTG Nordic.
Diversification Opportunities for Harmony Gold and NTG Nordic
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and NTG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Harmony Gold i.e., Harmony Gold and NTG Nordic go up and down completely randomly.
Pair Corralation between Harmony Gold and NTG Nordic
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.15 times more return on investment than NTG Nordic. However, Harmony Gold is 2.15 times more volatile than NTG Nordic Transport. It trades about 0.04 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.1 per unit of risk. If you would invest 850.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Harmony Gold Mining or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. NTG Nordic Transport
Performance |
| Timeline |
| Harmony Gold Mining |
| NTG Nordic Transport |
Harmony Gold and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and NTG Nordic
The main advantage of trading using opposite Harmony Gold and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. NorAm Drilling AS | NTG Nordic vs. Norsk Hydro ASA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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