Correlation Between Harmony Gold and Ionet
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Ionet 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 Ionet 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 ionet, you can compare the effects of market volatilities on Harmony Gold and Ionet 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 Ionet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Ionet.
Diversification Opportunities for Harmony Gold and Ionet
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Ionet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and ionet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ionet 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 Ionet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ionet has no effect on the direction of Harmony Gold i.e., Harmony Gold and Ionet go up and down completely randomly.
Pair Corralation between Harmony Gold and Ionet
Considering the 90-day investment horizon Harmony Gold is expected to generate 7.85 times less return on investment than Ionet. But when comparing it to its historical volatility, Harmony Gold Mining is 13.14 times less risky than Ionet. It trades about 0.08 of its potential returns per unit of risk. ionet is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in ionet on September 3, 2024 and sell it today you would earn a total of 347.00 from holding ionet or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.3% |
| Values | Daily Returns |
Harmony Gold Mining vs. ionet
Performance |
| Timeline |
| Harmony Gold Mining |
| ionet |
Harmony Gold and Ionet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Ionet
The main advantage of trading using opposite Harmony Gold and Ionet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Ionet 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 Ionet will offset losses from the drop in Ionet'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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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