Correlation Between Harmony Gold and VIB Vermgen

Can any of the company-specific risk be diversified away by investing in both Harmony Gold and VIB Vermgen 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 VIB Vermgen 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 VIB Vermgen AG, you can compare the effects of market volatilities on Harmony Gold and VIB Vermgen 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 VIB Vermgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and VIB Vermgen.

Diversification Opportunities for Harmony Gold and VIB Vermgen

0.56

Correlation Coefficient

Harmony Gold  VIB Vermgen

Very weak diversification

The 3 months correlation between Harmony and VIB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and VIB Vermgen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIB Vermgen 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 VIB Vermgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIB Vermgen AG has no effect on the direction of Harmony Gold i.e., Harmony Gold and VIB Vermgen go up and down completely randomly.

Pair Corralation between Harmony Gold and VIB Vermgen

Assuming the 90 days horizon Harmony Gold is expected to generate 3.15 times less return on investment than VIB Vermgen. In addition to that, Harmony Gold is 1.24 times more volatile than VIB Vermgen AG. It trades about 0.04 of its total potential returns per unit of risk. VIB Vermgen AG is currently generating about 0.17 per unit of volatility. If you would invest  761.00  in VIB Vermgen AG on September 12, 2024 and sell it today you would earn a total of  249.00  from holding VIB Vermgen AG or generate 32.72% return on investment over 90 days.

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

Harmony Gold Mining  vs.  VIB Vermgen AG

Harmony Gold Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Harmony Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VIB Vermgen AG

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIB Vermgen AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VIB Vermgen unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and VIB Vermgen

The main advantage of trading using opposite Harmony Gold and VIB Vermgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, VIB Vermgen 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 VIB Vermgen will offset losses from the drop in VIB Vermgen's long position.

The idea behind Harmony Gold Mining and VIB Vermgen AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.