Correlation Between Harmony Gold and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips, you can compare the effects of market volatilities on Harmony Gold and ConocoPhillips 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 ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and ConocoPhillips.
Diversification Opportunities for Harmony Gold and ConocoPhillips
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and ConocoPhillips is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips 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 ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Harmony Gold i.e., Harmony Gold and ConocoPhillips go up and down completely randomly.
Pair Corralation between Harmony Gold and ConocoPhillips
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.0 times more return on investment than ConocoPhillips. However, Harmony Gold is 2.0 times more volatile than ConocoPhillips. It trades about 0.04 of its potential returns per unit of risk. ConocoPhillips is currently generating about -0.24 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. ConocoPhillips
Performance |
| Timeline |
| Harmony Gold Mining |
| ConocoPhillips |
Harmony Gold and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and ConocoPhillips
The main advantage of trading using opposite Harmony Gold and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' 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 |
| ConocoPhillips vs. TEXAS ROADHOUSE | ConocoPhillips vs. AM EAGLE OUTFITTERS | ConocoPhillips vs. ALERION CLEANPOWER | ConocoPhillips vs. Air Transport Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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