Correlation Between Japan Tobacco and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco 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 Japan Tobacco and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and Harmony Gold Mining, you can compare the effects of market volatilities on Japan Tobacco 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 Japan Tobacco with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and Harmony Gold.
Diversification Opportunities for Japan Tobacco and Harmony Gold
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and Harmony is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco 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 Japan Tobacco 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 Japan Tobacco 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 Japan Tobacco i.e., Japan Tobacco and Harmony Gold go up and down completely randomly.
Pair Corralation between Japan Tobacco and Harmony Gold
Assuming the 90 days horizon Japan Tobacco is expected to generate 0.48 times more return on investment than Harmony Gold. However, Japan Tobacco is 2.1 times less risky than Harmony Gold. It trades about 0.03 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.21 per unit of risk. If you would invest 2,491 in Japan Tobacco on September 23, 2024 and sell it today you would earn a total of 32.00 from holding Japan Tobacco or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Japan Tobacco vs. Harmony Gold Mining
Performance |
Timeline |
Japan Tobacco |
Harmony Gold Mining |
Japan Tobacco and Harmony Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Japan Tobacco and Harmony Gold
The main advantage of trading using opposite Japan Tobacco and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco 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.Japan Tobacco vs. Cleanaway Waste Management | Japan Tobacco vs. CENTURIA OFFICE REIT | Japan Tobacco vs. Infrastrutture Wireless Italiane | Japan Tobacco vs. Q2M Managementberatung AG |
Harmony Gold vs. ZIJIN MINH UNSPADR20 | Harmony Gold vs. Newmont | Harmony Gold vs. Barrick Gold | Harmony Gold vs. Franco Nevada |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |