Correlation Between Mitsubishi Gas and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Mitsubishi Gas 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 Mitsubishi Gas and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi Gas Chemical and Harmony Gold Mining, you can compare the effects of market volatilities on Mitsubishi Gas 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 Mitsubishi Gas with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi Gas and Harmony Gold.
Diversification Opportunities for Mitsubishi Gas and Harmony Gold
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsubishi and Harmony is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi Gas Chemical 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 Mitsubishi Gas 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 Mitsubishi Gas Chemical 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 Mitsubishi Gas i.e., Mitsubishi Gas and Harmony Gold go up and down completely randomly.
Pair Corralation between Mitsubishi Gas and Harmony Gold
Assuming the 90 days trading horizon Mitsubishi Gas is expected to generate 2.56 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Mitsubishi Gas Chemical is 2.06 times less risky than Harmony Gold. It trades about 0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 795.00 in Harmony Gold Mining on November 4, 2024 and sell it today you would earn a total of 275.00 from holding Harmony Gold Mining or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitsubishi Gas Chemical vs. Harmony Gold Mining
Performance |
| Timeline |
| Mitsubishi Gas Chemical |
| Harmony Gold Mining |
Mitsubishi Gas and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi Gas and Harmony Gold
The main advantage of trading using opposite Mitsubishi Gas and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi Gas 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.| Mitsubishi Gas vs. Avanos Medical | Mitsubishi Gas vs. Elmos Semiconductor SE | Mitsubishi Gas vs. CompuGroup Medical SE | Mitsubishi Gas vs. MagnaChip Semiconductor Corp |
| Harmony Gold vs. ePlay Digital | Harmony Gold vs. InPlay Oil Corp | Harmony Gold vs. Sun Life Financial | Harmony Gold vs. Chiba Bank |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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