Correlation Between Stag Industrial and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Stag Industrial 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 Stag Industrial and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and Harmony Gold Mining, you can compare the effects of market volatilities on Stag Industrial 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 Stag Industrial with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and Harmony Gold.
Diversification Opportunities for Stag Industrial and Harmony Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stag and Harmony is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial 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 Stag Industrial 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 Stag Industrial 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 Stag Industrial i.e., Stag Industrial and Harmony Gold go up and down completely randomly.
Pair Corralation between Stag Industrial and Harmony Gold
Assuming the 90 days trading horizon Stag Industrial is expected to generate 8.22 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Stag Industrial is 2.36 times less risky than Harmony Gold. It trades about 0.02 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 317.00 in Harmony Gold Mining on October 19, 2024 and sell it today you would earn a total of 608.00 from holding Harmony Gold Mining or generate 191.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. Harmony Gold Mining
Performance |
| Timeline |
| Stag Industrial |
| Harmony Gold Mining |
Stag Industrial and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and Harmony Gold
The main advantage of trading using opposite Stag Industrial and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial 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.| Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc |
| Harmony Gold vs. Apollo Investment Corp | Harmony Gold vs. Siemens Healthineers AG | Harmony Gold vs. National Health Investors | Harmony Gold vs. WESANA HEALTH HOLD |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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