Correlation Between Harmony Gold and IAMGold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and IAMGold 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 IAMGold 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 IAMGold, you can compare the effects of market volatilities on Harmony Gold and IAMGold 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 IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and IAMGold.
Diversification Opportunities for Harmony Gold and IAMGold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and IAMGold is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold 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 IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Harmony Gold i.e., Harmony Gold and IAMGold go up and down completely randomly.
Pair Corralation between Harmony Gold and IAMGold
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.94 times more return on investment than IAMGold. However, Harmony Gold Mining is 1.07 times less risky than IAMGold. It trades about 0.08 of its potential returns per unit of risk. IAMGold is currently generating about 0.07 per unit of risk. If you would invest 336.00 in Harmony Gold Mining on August 24, 2024 and sell it today you would earn a total of 630.00 from holding Harmony Gold Mining or generate 187.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. IAMGold
Performance |
| Timeline |
| Harmony Gold Mining |
| IAMGold |
Harmony Gold and IAMGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and IAMGold
The main advantage of trading using opposite Harmony Gold and IAMGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, IAMGold 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 IAMGold will offset losses from the drop in IAMGold'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 |
| IAMGold vs. Gold Fields Ltd | IAMGold vs. Barrick Gold Corp | IAMGold vs. Pan American Silver | IAMGold vs. Franco Nevada |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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