Correlation Between TD Holdings and Harmony Gold

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

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

Diversification Opportunities for TD Holdings and Harmony Gold

-0.14

Correlation Coefficient

TD Holdings  Harmony Gold

Good diversification

The 3 months correlation between GLG and Harmony is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding TD 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 TD Holdings 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 TD 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 TD Holdings i.e., TD Holdings and Harmony Gold go up and down completely randomly.

Pair Corralation between TD Holdings and Harmony Gold

If you would invest  912.00  in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Harmony Gold Mining or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

TD Holdings  vs.  Harmony Gold Mining

TD Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TD Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, TD Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Harmony Gold Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Harmony Gold is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TD Holdings and Harmony Gold

The main advantage of trading using opposite TD Holdings and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Holdings 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 TD 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.