Correlation Between Harmony Gold and Banco Patagonia
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Banco Patagonia 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 Banco Patagonia 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 Banco Patagonia, you can compare the effects of market volatilities on Harmony Gold and Banco Patagonia 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 Banco Patagonia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Banco Patagonia.
Diversification Opportunities for Harmony Gold and Banco Patagonia
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Banco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Banco Patagonia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Patagonia 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 Banco Patagonia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Patagonia has no effect on the direction of Harmony Gold i.e., Harmony Gold and Banco Patagonia go up and down completely randomly.
Pair Corralation between Harmony Gold and Banco Patagonia
Assuming the 90 days trading horizon Harmony Gold is expected to generate 2.44 times less return on investment than Banco Patagonia. But when comparing it to its historical volatility, Harmony Gold Mining is 1.25 times less risky than Banco Patagonia. It trades about 0.06 of its potential returns per unit of risk. Banco Patagonia is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 68,000 in Banco Patagonia on December 4, 2024 and sell it today you would earn a total of 138,000 from holding Banco Patagonia or generate 202.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Banco Patagonia
Performance |
| Timeline |
| Harmony Gold Mining |
| Banco Patagonia |
Harmony Gold and Banco Patagonia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Banco Patagonia
The main advantage of trading using opposite Harmony Gold and Banco Patagonia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Banco Patagonia 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 Banco Patagonia will offset losses from the drop in Banco Patagonia's long position.| Harmony Gold vs. Verizon Communications | Harmony Gold vs. United States Steel | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
| Banco Patagonia vs. United States Steel | Banco Patagonia vs. Compania de Transporte | Banco Patagonia vs. Harmony Gold Mining | Banco Patagonia vs. Agrometal SAI |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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