Correlation Between Ameriprise Financial and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both Ameriprise Financial 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 Ameriprise Financial and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ameriprise Financial and Harmony Gold Mining, you can compare the effects of market volatilities on Ameriprise Financial 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 Ameriprise Financial with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Harmony Gold.

Diversification Opportunities for Ameriprise Financial and Harmony Gold

-0.49

Correlation Coefficient

Ameriprise Financial  Harmony Gold

Very good diversification

The 3 months correlation between Ameriprise and Harmony is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial i.e., Ameriprise Financial and Harmony Gold go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Harmony Gold

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 1.76 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Ameriprise Financial is 2.28 times less risky than Harmony Gold. It trades about 0.08 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  381.00  in Harmony Gold Mining on September 30, 2024 and sell it today you would earn a total of  443.00  from holding Harmony Gold Mining or generate 116.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ameriprise Financial  vs.  Harmony Gold Mining

Ameriprise Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ameriprise Financial and Harmony Gold

The main advantage of trading using opposite Ameriprise Financial and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise Financial 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.

The idea behind Ameriprise Financial and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.