Correlation Between Harmony Gold and Nintendo
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Nintendo 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 Nintendo 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 Nintendo Co, you can compare the effects of market volatilities on Harmony Gold and Nintendo 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 Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Nintendo.
Diversification Opportunities for Harmony Gold and Nintendo
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Nintendo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo 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 Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of Harmony Gold i.e., Harmony Gold and Nintendo go up and down completely randomly.
Pair Corralation between Harmony Gold and Nintendo
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.13 times more return on investment than Nintendo. However, Harmony Gold is 1.13 times more volatile than Nintendo Co. It trades about 0.4 of its potential returns per unit of risk. Nintendo Co is currently generating about 0.01 per unit of risk. If you would invest 780.00 in Harmony Gold Mining on October 24, 2024 and sell it today you would earn a total of 155.00 from holding Harmony Gold Mining or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Nintendo Co
Performance |
| Timeline |
| Harmony Gold Mining |
| Nintendo |
Harmony Gold and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Nintendo
The main advantage of trading using opposite Harmony Gold and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| Harmony Gold vs. QBE Insurance Group | Harmony Gold vs. RYANAIR HLDGS ADR | Harmony Gold vs. CHINA SOUTHN AIR H | Harmony Gold vs. HANOVER INSURANCE |
| Nintendo vs. Zijin Mining Group | Nintendo vs. Harmony Gold Mining | Nintendo vs. SENECA FOODS A | Nintendo vs. Monument Mining Limited |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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