Correlation Between Harmony Gold and Pentair Plc
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Pentair Plc 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 Pentair Plc 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 Pentair plc, you can compare the effects of market volatilities on Harmony Gold and Pentair Plc 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 Pentair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Pentair Plc.
Diversification Opportunities for Harmony Gold and Pentair Plc
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Pentair is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Pentair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair plc 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 Pentair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair plc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Pentair Plc go up and down completely randomly.
Pair Corralation between Harmony Gold and Pentair Plc
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Pentair Plc. In addition to that, Harmony Gold is 2.51 times more volatile than Pentair plc. It trades about -0.19 of its total potential returns per unit of risk. Pentair plc is currently generating about 0.37 per unit of volatility. If you would invest 9,142 in Pentair plc on August 29, 2024 and sell it today you would earn a total of 1,113 from holding Pentair plc or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Harmony Gold Mining vs. Pentair plc
Performance |
| Timeline |
| Harmony Gold Mining |
| Pentair plc |
Harmony Gold and Pentair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Pentair Plc
The main advantage of trading using opposite Harmony Gold and Pentair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Pentair Plc 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 Pentair Plc will offset losses from the drop in Pentair Plc's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
| Pentair Plc vs. ABB | Pentair Plc vs. Superior Plus Corp | Pentair Plc vs. NMI Holdings | Pentair Plc vs. SIVERS SEMICONDUCTORS AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |