Correlation Between Harmony Gold and AH Vest

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

Diversification Opportunities for Harmony Gold and AH Vest

-0.44

Correlation Coefficient

Harmony Gold  AH Vest

Very good diversification

The 3 months correlation between Harmony and AHL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited 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 AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Harmony Gold i.e., Harmony Gold and AH Vest go up and down completely randomly.

Pair Corralation between Harmony Gold and AH Vest

Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.03 times more return on investment than AH Vest. However, Harmony Gold is 1.03 times more volatile than AH Vest Limited. It trades about 0.07 of its potential returns per unit of risk. AH Vest Limited is currently generating about -0.01 per unit of risk. If you would invest  1,014,100  in Harmony Gold Mining on October 11, 2024 and sell it today you would earn a total of  628,500  from holding Harmony Gold Mining or generate 61.98% return on investment over 90 days.

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

Harmony Gold Mining  vs.  AH Vest Limited

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. In spite of rather sound technical and fundamental indicators, Harmony Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AH Vest Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AH Vest Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AH Vest exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and AH Vest

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

The idea behind Harmony Gold Mining and AH Vest Limited 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.