Correlation Between Harmony Gold and First Republic
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Harmony Gold and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and First Republic.
Diversification Opportunities for Harmony Gold and First Republic
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and First is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Harmony Gold i.e., Harmony Gold and First Republic go up and down completely randomly.
Pair Corralation between Harmony Gold and First Republic
If you would invest 825.00 in Harmony Gold Mining on November 5, 2024 and sell it today you would earn a total of 302.00 from holding Harmony Gold Mining or generate 36.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Harmony Gold Mining vs. First Republic Bank
Performance |
| Timeline |
| Harmony Gold Mining |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Harmony Gold and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and First Republic
The main advantage of trading using opposite Harmony Gold and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Harmony Gold vs. Agnico Eagle Mines | Harmony Gold vs. Pan American Silver | Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Kinross Gold |
| First Republic vs. Coda Octopus Group | First Republic vs. Dave Busters Entertainment | First Republic vs. Weibo Corp | First Republic vs. Pinterest |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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