Correlation Between Harmony Gold and MONGOLIA ENERG
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and MONGOLIA ENERG 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 MONGOLIA ENERG 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 MONGOLIA ENERG HD 02, you can compare the effects of market volatilities on Harmony Gold and MONGOLIA ENERG 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 MONGOLIA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and MONGOLIA ENERG.
Diversification Opportunities for Harmony Gold and MONGOLIA ENERG
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and MONGOLIA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and MONGOLIA ENERG HD 02 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIA ENERG HD 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 MONGOLIA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIA ENERG HD has no effect on the direction of Harmony Gold i.e., Harmony Gold and MONGOLIA ENERG go up and down completely randomly.
Pair Corralation between Harmony Gold and MONGOLIA ENERG
Assuming the 90 days horizon Harmony Gold is expected to generate 1.55 times less return on investment than MONGOLIA ENERG. But when comparing it to its historical volatility, Harmony Gold Mining is 2.81 times less risky than MONGOLIA ENERG. It trades about 0.08 of its potential returns per unit of risk. MONGOLIA ENERG HD 02 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7.50 in MONGOLIA ENERG HD 02 on September 12, 2024 and sell it today you would lose (0.20) from holding MONGOLIA ENERG HD 02 or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. MONGOLIA ENERG HD 02
Performance |
| Timeline |
| Harmony Gold Mining |
| MONGOLIA ENERG HD |
Harmony Gold and MONGOLIA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and MONGOLIA ENERG
The main advantage of trading using opposite Harmony Gold and MONGOLIA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, MONGOLIA ENERG 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 MONGOLIA ENERG will offset losses from the drop in MONGOLIA ENERG'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 |
| MONGOLIA ENERG vs. Superior Plus Corp | MONGOLIA ENERG vs. SIVERS SEMICONDUCTORS AB | MONGOLIA ENERG vs. Norsk Hydro ASA | MONGOLIA ENERG vs. Reliance Steel Aluminum |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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