Correlation Between Harmony Gold and Euronav NV
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Euronav NV 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 Euronav NV 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 Euronav NV, you can compare the effects of market volatilities on Harmony Gold and Euronav NV 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 Euronav NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Euronav NV.
Diversification Opportunities for Harmony Gold and Euronav NV
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Euronav is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Euronav NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronav NV 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 Euronav NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronav NV has no effect on the direction of Harmony Gold i.e., Harmony Gold and Euronav NV go up and down completely randomly.
Pair Corralation between Harmony Gold and Euronav NV
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.91 times more return on investment than Euronav NV. However, Harmony Gold is 1.91 times more volatile than Euronav NV. It trades about -0.02 of its potential returns per unit of risk. Euronav NV is currently generating about -0.27 per unit of risk. If you would invest 1,033 in Harmony Gold Mining on September 2, 2024 and sell it today you would lose (83.00) from holding Harmony Gold Mining or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Harmony Gold Mining vs. Euronav NV
Performance |
| Timeline |
| Harmony Gold Mining |
| Euronav NV |
Harmony Gold and Euronav NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Euronav NV
The main advantage of trading using opposite Harmony Gold and Euronav NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Euronav NV 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 Euronav NV will offset losses from the drop in Euronav NV's long position.| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. Grande Portage Resources |
| Euronav NV vs. Plains All American | Euronav NV vs. Hess Midstream Partners | Euronav NV vs. Plains GP Holdings | Euronav NV vs. Antero Midstream Partners |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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