Correlation Between Harmony Gold and Nabors Industries
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Nabors Industries 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 Nabors Industries 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 Nabors Industries, you can compare the effects of market volatilities on Harmony Gold and Nabors Industries 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 Nabors Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Nabors Industries.
Diversification Opportunities for Harmony Gold and Nabors Industries
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Nabors is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Nabors Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Industries 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 Nabors Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Industries has no effect on the direction of Harmony Gold i.e., Harmony Gold and Nabors Industries go up and down completely randomly.
Pair Corralation between Harmony Gold and Nabors Industries
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Nabors Industries. In addition to that, Harmony Gold is 1.07 times more volatile than Nabors Industries. It trades about -0.18 of its total potential returns per unit of risk. Nabors Industries is currently generating about 0.04 per unit of volatility. If you would invest 7,201 in Nabors Industries on September 2, 2024 and sell it today you would earn a total of 142.00 from holding Nabors Industries or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Nabors Industries
Performance |
| Timeline |
| Harmony Gold Mining |
| Nabors Industries |
Harmony Gold and Nabors Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Nabors Industries
The main advantage of trading using opposite Harmony Gold and Nabors Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Nabors Industries 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 Nabors Industries will offset losses from the drop in Nabors Industries' long position.| Harmony Gold vs. Fortitude Gold Corp | Harmony Gold vs. New Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. GoldMining |
| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |