Correlation Between Parker Hannifin and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Parker Hannifin 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 Parker Hannifin and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parker Hannifin and Harmony Gold Mining, you can compare the effects of market volatilities on Parker Hannifin 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 Parker Hannifin with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parker Hannifin and Harmony Gold.
Diversification Opportunities for Parker Hannifin and Harmony Gold
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Parker and Harmony is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Parker Hannifin 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 Parker Hannifin 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 Parker Hannifin 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 Parker Hannifin i.e., Parker Hannifin and Harmony Gold go up and down completely randomly.
Pair Corralation between Parker Hannifin and Harmony Gold
Allowing for the 90-day total investment horizon Parker Hannifin is expected to generate 3.21 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Parker Hannifin is 1.5 times less risky than Harmony Gold. It trades about 0.31 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.67 of returns per unit of risk over similar time horizon. If you would invest 821.00 in Harmony Gold Mining on November 1, 2024 and sell it today you would earn a total of 316.00 from holding Harmony Gold Mining or generate 38.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parker Hannifin vs. Harmony Gold Mining
Performance |
| Timeline |
| Parker Hannifin |
| Harmony Gold Mining |
Parker Hannifin and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parker Hannifin and Harmony Gold
The main advantage of trading using opposite Parker Hannifin and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parker Hannifin 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.| Parker Hannifin vs. Illinois Tool Works | Parker Hannifin vs. Pentair PLC | Parker Hannifin vs. Emerson Electric | Parker Hannifin vs. Smith AO |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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