Correlation Between Harmony Gold and Aurubis AG
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Aurubis AG 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 Harmony Gold and Aurubis AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Gold Mining and Aurubis AG, you can compare the effects of market volatilities on Harmony Gold and Aurubis AG 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 Harmony Gold with a short position of Aurubis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Aurubis AG.
Diversification Opportunities for Harmony Gold and Aurubis AG
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Aurubis is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG and Harmony Gold 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 Harmony Gold Mining are associated (or correlated) with Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of Harmony Gold i.e., Harmony Gold and Aurubis AG go up and down completely randomly.
Pair Corralation between Harmony Gold and Aurubis AG
Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Aurubis AG. In addition to that, Harmony Gold is 1.27 times more volatile than Aurubis AG. It trades about -0.05 of its total potential returns per unit of risk. Aurubis AG is currently generating about 0.14 per unit of volatility. If you would invest 6,220 in Aurubis AG on September 24, 2024 and sell it today you would earn a total of 1,570 from holding Aurubis AG or generate 25.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Aurubis AG
Performance |
Timeline |
Harmony Gold Mining |
Aurubis AG |
Harmony Gold and Aurubis AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Aurubis AG
The main advantage of trading using opposite Harmony Gold and Aurubis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Aurubis AG 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 Aurubis AG will offset losses from the drop in Aurubis AG's long position.Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Franco Nevada |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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