Correlation Between Harmony Gold and MSCI

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

Diversification Opportunities for Harmony Gold and MSCI

0.18

Correlation Coefficient

Harmony Gold  MSCI

Average diversification

The 3 months correlation between Harmony and MSCI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and MSCI go up and down completely randomly.

Pair Corralation between Harmony Gold and MSCI

Assuming the 90 days horizon Harmony Gold is expected to generate 3.72 times less return on investment than MSCI. In addition to that, Harmony Gold is 2.8 times more volatile than MSCI Inc. It trades about 0.01 of its total potential returns per unit of risk. MSCI Inc is currently generating about 0.12 per unit of volatility. If you would invest  52,096  in MSCI Inc on September 1, 2024 and sell it today you would earn a total of  5,644  from holding MSCI Inc or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Harmony Gold Mining  vs.  MSCI Inc

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 nearly stable basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MSCI Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MSCI may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Harmony Gold and MSCI

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

The idea behind Harmony Gold Mining and MSCI Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.