Correlation Between MAG SILVER and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and Harmony 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 MAG SILVER and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Harmony Gold Mining, you can compare the effects of market volatilities on MAG SILVER and Harmony 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 MAG SILVER with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Harmony Gold.
Diversification Opportunities for MAG SILVER and Harmony Gold
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAG and Harmony is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and MAG SILVER 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 MAG SILVER are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of MAG SILVER i.e., MAG SILVER and Harmony Gold go up and down completely randomly.
Pair Corralation between MAG SILVER and Harmony Gold
Assuming the 90 days trading horizon MAG SILVER is expected to generate 2.26 times less return on investment than Harmony Gold. In addition to that, MAG SILVER is 1.26 times more volatile than Harmony Gold Mining. It trades about 0.21 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.6 per unit of volatility. If you would invest 805.00 in Harmony Gold Mining on November 4, 2024 and sell it today you would earn a total of 265.00 from holding Harmony Gold Mining or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MAG SILVER vs. Harmony Gold Mining
Performance |
| Timeline |
| MAG SILVER |
| Harmony Gold Mining |
MAG SILVER and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Harmony Gold
The main advantage of trading using opposite MAG SILVER and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| MAG SILVER vs. Spirent Communications plc | MAG SILVER vs. Chengdu PUTIAN Telecommunications | MAG SILVER vs. ITALIAN WINE BRANDS | MAG SILVER vs. Ross Stores |
| Harmony Gold vs. TITAN MACHINERY | Harmony Gold vs. Dairy Farm International | Harmony Gold vs. AOYAMA TRADING | Harmony Gold vs. SEI INVESTMENTS |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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