Correlation Between Renesas Electronics and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Renesas Electronics 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 Renesas Electronics and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renesas Electronics and Harmony Gold Mining, you can compare the effects of market volatilities on Renesas Electronics 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 Renesas Electronics with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renesas Electronics and Harmony Gold.
Diversification Opportunities for Renesas Electronics and Harmony Gold
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Renesas and Harmony is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics i.e., Renesas Electronics and Harmony Gold go up and down completely randomly.
Pair Corralation between Renesas Electronics and Harmony Gold
Assuming the 90 days horizon Renesas Electronics is expected to generate 0.8 times more return on investment than Harmony Gold. However, Renesas Electronics is 1.26 times less risky than Harmony Gold. It trades about -0.03 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.17 per unit of risk. If you would invest 1,251 in Renesas Electronics on September 1, 2024 and sell it today you would lose (34.00) from holding Renesas Electronics or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renesas Electronics vs. Harmony Gold Mining
Performance |
| Timeline |
| Renesas Electronics |
| Harmony Gold Mining |
Renesas Electronics and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renesas Electronics and Harmony Gold
The main advantage of trading using opposite Renesas Electronics and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renesas Electronics 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.| Renesas Electronics vs. Scientific Games | Renesas Electronics vs. The Hanover Insurance | Renesas Electronics vs. Boyd Gaming | Renesas Electronics vs. ZURICH INSURANCE GROUP |
| Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings | Harmony Gold vs. Origin Agritech |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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