Correlation Between Nippon Light and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Nippon Light 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 Nippon Light and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Light Metal and Harmony Gold Mining, you can compare the effects of market volatilities on Nippon Light 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 Nippon Light with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Light and Harmony Gold.
Diversification Opportunities for Nippon Light and Harmony Gold
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nippon and Harmony is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Light Metal 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 Nippon Light 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 Nippon Light Metal 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 Nippon Light i.e., Nippon Light and Harmony Gold go up and down completely randomly.
Pair Corralation between Nippon Light and Harmony Gold
Assuming the 90 days horizon Nippon Light is expected to generate 92.63 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Nippon Light Metal is 1.31 times less risky than Harmony Gold. It trades about 0.01 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.6 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nippon Light Metal vs. Harmony Gold Mining
Performance |
| Timeline |
| Nippon Light Metal |
| Harmony Gold Mining |
Nippon Light and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Light and Harmony Gold
The main advantage of trading using opposite Nippon Light and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Light 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.| Nippon Light vs. Austevoll Seafood ASA | Nippon Light vs. TYSON FOODS A | Nippon Light vs. ecotel communication ag | Nippon Light vs. Zoom Video Communications |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets |