Correlation Between Harmony Gold and Corporate Travel

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

Diversification Opportunities for Harmony Gold and Corporate Travel

-0.66

Correlation Coefficient

Harmony Gold  Corporate Travel

Excellent diversification

The 3 months correlation between Harmony and Corporate is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man 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 Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Harmony Gold i.e., Harmony Gold and Corporate Travel go up and down completely randomly.

Pair Corralation between Harmony Gold and Corporate Travel

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Corporate Travel. In addition to that, Harmony Gold is 1.19 times more volatile than Corporate Travel Management. It trades about -0.29 of its total potential returns per unit of risk. Corporate Travel Management is currently generating about -0.23 per unit of volatility. If you would invest  845.00  in Corporate Travel Management on September 23, 2024 and sell it today you would lose (90.00) from holding Corporate Travel Management or give up 10.65% of portfolio value over 90 days.

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

Harmony Gold Mining  vs.  Corporate Travel Management

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Corporate Travel Man

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Harmony Gold and Corporate Travel

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

The idea behind Harmony Gold Mining and Corporate Travel Management 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.

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 CEOs Directory module to screen CEOs from public companies around the world.