Correlation Between Noble Plc and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Noble Plc 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 Noble Plc and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and Harmony Gold Mining, you can compare the effects of market volatilities on Noble Plc 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 Noble Plc with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Harmony Gold.
Diversification Opportunities for Noble Plc and Harmony Gold
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noble and Harmony is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc 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 Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and Harmony Gold go up and down completely randomly.
Pair Corralation between Noble Plc and Harmony Gold
Allowing for the 90-day total investment horizon Noble plc is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Noble plc is 1.52 times less risky than Harmony Gold. The stock trades about -0.45 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,067 in Harmony Gold Mining on November 29, 2024 and sell it today you would earn a total of 21.00 from holding Harmony Gold Mining or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Noble plc vs. Harmony Gold Mining
Performance |
| Timeline |
| Noble plc |
| Harmony Gold Mining |
Noble Plc and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and Harmony Gold
The main advantage of trading using opposite Noble Plc and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc 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.| Noble Plc vs. Seadrill Limited | Noble Plc vs. Borr Drilling | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Transocean |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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