Correlation Between Harmony Gold and Gaztransport Technigaz

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

Diversification Opportunities for Harmony Gold and Gaztransport Technigaz

-0.21

Correlation Coefficient

Harmony Gold  Gaztransport Technigaz

Very good diversification

The 3 months correlation between Harmony and Gaztransport is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Harmony Gold i.e., Harmony Gold and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between Harmony Gold and Gaztransport Technigaz

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Gaztransport Technigaz. In addition to that, Harmony Gold is 1.58 times more volatile than Gaztransport Technigaz SA. It trades about -0.18 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about -0.1 per unit of volatility. If you would invest  13,532  in Gaztransport Technigaz SA on September 20, 2024 and sell it today you would lose (532.00) from holding Gaztransport Technigaz SA or give up 3.93% of portfolio value over 90 days.

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

Harmony Gold Mining  vs.  Gaztransport Technigaz SA

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.

Gaztransport Technigaz

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Harmony Gold and Gaztransport Technigaz

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

The idea behind Harmony Gold Mining and Gaztransport Technigaz SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.