Correlation Between Harmony Gold and Amgen
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Amgen 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 Amgen 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 Amgen Inc, you can compare the effects of market volatilities on Harmony Gold and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Amgen.
Diversification Opportunities for Harmony Gold and Amgen
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Amgen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and Amgen go up and down completely randomly.
Pair Corralation between Harmony Gold and Amgen
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 4.03 times more return on investment than Amgen. However, Harmony Gold is 4.03 times more volatile than Amgen Inc. It trades about 0.1 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.02 per unit of risk. If you would invest 202.00 in Harmony Gold Mining on August 26, 2024 and sell it today you would earn a total of 748.00 from holding Harmony Gold Mining or generate 370.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.59% |
| Values | Daily Returns |
Harmony Gold Mining vs. Amgen Inc
Performance |
| Timeline |
| Harmony Gold Mining |
| Amgen Inc |
Harmony Gold and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Amgen
The main advantage of trading using opposite Harmony Gold and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Liberty Gold Corp | Harmony Gold vs. Orezone Gold Corp | Harmony Gold vs. Radisson Mining Resources |
| Amgen vs. Eliem Therapeutics | Amgen vs. HCW Biologics | Amgen vs. Scpharmaceuticals | Amgen vs. Milestone Pharmaceuticals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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