Correlation Between Harmony Gold and NVIDIA
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and NVIDIA 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 NVIDIA 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 NVIDIA, you can compare the effects of market volatilities on Harmony Gold and NVIDIA 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 NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and NVIDIA.
Diversification Opportunities for Harmony Gold and NVIDIA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and NVIDIA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Harmony Gold i.e., Harmony Gold and NVIDIA go up and down completely randomly.
Pair Corralation between Harmony Gold and NVIDIA
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.54 times more return on investment than NVIDIA. However, Harmony Gold is 1.54 times more volatile than NVIDIA. It trades about -0.03 of its potential returns per unit of risk. NVIDIA is currently generating about -0.27 per unit of risk. If you would invest 1,062,500 in Harmony Gold Mining on September 13, 2024 and sell it today you would lose (35,000) from holding Harmony Gold Mining or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harmony Gold Mining vs. NVIDIA
Performance |
| Timeline |
| Harmony Gold Mining |
| NVIDIA |
Harmony Gold and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and NVIDIA
The main advantage of trading using opposite Harmony Gold and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, NVIDIA 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 NVIDIA will offset losses from the drop in NVIDIA's long position.| Harmony Gold vs. Edesa Holding SA | Harmony Gold vs. Vista Energy, SAB | Harmony Gold vs. United States Steel | Harmony Gold vs. Pfizer Inc |
| NVIDIA vs. Intel Corp CEDEAR | NVIDIA vs. Edesa Holding SA | NVIDIA vs. Longvie SA | NVIDIA vs. Vista Energy, SAB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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