Correlation Between NTG Nordic and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both NTG Nordic 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 NTG Nordic and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NTG Nordic Transport and Harmony Gold Mining, you can compare the effects of market volatilities on NTG Nordic 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 NTG Nordic with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Harmony Gold.
Diversification Opportunities for NTG Nordic and Harmony Gold
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NTG and Harmony is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport 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 NTG Nordic 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 NTG Nordic Transport 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 NTG Nordic i.e., NTG Nordic and Harmony Gold go up and down completely randomly.
Pair Corralation between NTG Nordic and Harmony Gold
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, NTG Nordic Transport is 2.15 times less risky than Harmony Gold. The stock trades about -0.1 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Harmony Gold Mining or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NTG Nordic Transport vs. Harmony Gold Mining
Performance |
| Timeline |
| NTG Nordic Transport |
| Harmony Gold Mining |
NTG Nordic and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and Harmony Gold
The main advantage of trading using opposite NTG Nordic and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic 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.| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. NorAm Drilling AS | NTG Nordic vs. Norsk Hydro ASA |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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