Correlation Between Fidelis Insurance and Harmony Gold

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

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

Diversification Opportunities for Fidelis Insurance and Harmony Gold

-0.53

Correlation Coefficient

Fidelis Insurance  Harmony Gold

Excellent diversification

The 3 months correlation between Fidelis and Harmony is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelis Insurance Holdings 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 Fidelis Insurance 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 Fidelis Insurance Holdings 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 Fidelis Insurance i.e., Fidelis Insurance and Harmony Gold go up and down completely randomly.

Pair Corralation between Fidelis Insurance and Harmony Gold

Given the investment horizon of 90 days Fidelis Insurance Holdings is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Fidelis Insurance Holdings is 1.83 times less risky than Harmony Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  827.00  in Harmony Gold Mining on December 29, 2024 and sell it today you would earn a total of  373.00  from holding Harmony Gold Mining or generate 45.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

Fidelis Insurance Holdings  vs.  Harmony Gold Mining

Fidelis Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelis Insurance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Harmony Gold Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Harmony Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelis Insurance and Harmony Gold

The main advantage of trading using opposite Fidelis Insurance and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelis Insurance 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 Fidelis Insurance Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.