Correlation Between Harmony Gold and Realty Income
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Realty Income 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 Realty Income 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 Realty Income, you can compare the effects of market volatilities on Harmony Gold and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Realty Income.
Diversification Opportunities for Harmony Gold and Realty Income
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and Realty is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Harmony Gold i.e., Harmony Gold and Realty Income go up and down completely randomly.
Pair Corralation between Harmony Gold and Realty Income
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.91 times more return on investment than Realty Income. However, Harmony Gold is 2.91 times more volatile than Realty Income. It trades about 0.08 of its potential returns per unit of risk. Realty Income is currently generating about 0.01 per unit of risk. If you would invest 317.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 548.00 from holding Harmony Gold Mining or generate 172.87% 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. Realty Income
Performance |
| Timeline |
| Harmony Gold Mining |
| Realty Income |
Harmony Gold and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Realty Income
The main advantage of trading using opposite Harmony Gold and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income'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 |
| Realty Income vs. GALENA MINING LTD | Realty Income vs. Calibre Mining Corp | Realty Income vs. Harmony Gold Mining | Realty Income vs. United States Steel |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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