Correlation Between NVIDIA and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Harmony Gold Mining, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Harmony Gold.
Diversification Opportunities for NVIDIA and Harmony Gold
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between NVIDIA and Harmony is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA 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 NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Harmony Gold go up and down completely randomly.
Pair Corralation between NVIDIA and Harmony Gold
Assuming the 90 days trading horizon NVIDIA is expected to generate 0.94 times more return on investment than Harmony Gold. However, NVIDIA is 1.07 times less risky than Harmony Gold. It trades about 0.15 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.12 per unit of risk. If you would invest 100,980 in NVIDIA on September 12, 2024 and sell it today you would earn a total of 505,020 from holding NVIDIA or generate 500.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Harmony Gold Mining
Performance |
| Timeline |
| NVIDIA |
| Harmony Gold Mining |
NVIDIA and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Harmony Gold
The main advantage of trading using opposite NVIDIA and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Harmony Gold Mining | NVIDIA vs. Telecom Argentina | NVIDIA vs. Transportadora de Gas | NVIDIA vs. United States Steel |
| Harmony Gold vs. Edesa Holding SA | Harmony Gold vs. Vista Energy, SAB | Harmony Gold vs. United States Steel | Harmony Gold vs. Pfizer Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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