Correlation Between Harmony Gold and Argo Gold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Argo Gold 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 Argo Gold 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 Argo Gold, you can compare the effects of market volatilities on Harmony Gold and Argo Gold 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 Argo Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Argo Gold.
Diversification Opportunities for Harmony Gold and Argo Gold
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Argo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Argo Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Gold 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 Argo Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Gold has no effect on the direction of Harmony Gold i.e., Harmony Gold and Argo Gold go up and down completely randomly.
Pair Corralation between Harmony Gold and Argo Gold
Considering the 90-day investment horizon Harmony Gold is expected to generate 113.29 times less return on investment than Argo Gold. But when comparing it to its historical volatility, Harmony Gold Mining is 3.63 times less risky than Argo Gold. It trades about 0.0 of its potential returns per unit of risk. Argo Gold is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.44 in Argo Gold on September 12, 2024 and sell it today you would earn a total of 0.26 from holding Argo Gold or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harmony Gold Mining vs. Argo Gold
Performance |
| Timeline |
| Harmony Gold Mining |
| Argo Gold |
Harmony Gold and Argo Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Argo Gold
The main advantage of trading using opposite Harmony Gold and Argo Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Argo Gold 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 Argo Gold will offset losses from the drop in Argo Gold's long position.| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
| Argo Gold vs. Revival Gold | Argo Gold vs. Galiano Gold | Argo Gold vs. US Gold Corp | Argo Gold vs. HUMANA INC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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