Correlation Between Harmony Gold and Royal Gold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Royal 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 Harmony Gold and Royal Gold 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 Royal Gold, you can compare the effects of market volatilities on Harmony Gold and Royal 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 Harmony Gold with a short position of Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Royal Gold.
Diversification Opportunities for Harmony Gold and Royal Gold
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harmony and Royal is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Gold 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 Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of Harmony Gold i.e., Harmony Gold and Royal Gold go up and down completely randomly.
Pair Corralation between Harmony Gold and Royal Gold
Considering the 90-day investment horizon Harmony Gold is expected to generate 1.97 times less return on investment than Royal Gold. In addition to that, Harmony Gold is 1.79 times more volatile than Royal Gold. It trades about 0.04 of its total potential returns per unit of risk. Royal Gold is currently generating about 0.15 per unit of volatility. If you would invest 12,101 in Royal Gold on February 14, 2024 and sell it today you would earn a total of 544.00 from holding Royal Gold or generate 4.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Harmony Gold Mining vs. Royal Gold
Performance |
Timeline |
Harmony Gold Mining |
Royal Gold |
Harmony Gold and Royal Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Royal Gold
The main advantage of trading using opposite Harmony Gold and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Royal 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 Royal Gold will offset losses from the drop in Royal Gold's long position.Harmony Gold vs. Osisko Gold Ro | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. SSR Mining | Harmony Gold vs. Idaho Strategic Resources |
Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
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.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |