Correlation Between Harmony Gold and Lewis Group
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Lewis Group 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 Lewis Group 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 Lewis Group Limited, you can compare the effects of market volatilities on Harmony Gold and Lewis Group 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 Lewis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Lewis Group.
Diversification Opportunities for Harmony Gold and Lewis Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Lewis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Lewis Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Group 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 Lewis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Group Limited has no effect on the direction of Harmony Gold i.e., Harmony Gold and Lewis Group go up and down completely randomly.
Pair Corralation between Harmony Gold and Lewis Group
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Lewis Group. In addition to that, Harmony Gold is 1.11 times more volatile than Lewis Group Limited. It trades about -0.16 of its total potential returns per unit of risk. Lewis Group Limited is currently generating about 0.14 per unit of volatility. If you would invest 760,500 in Lewis Group Limited on September 26, 2024 and sell it today you would earn a total of 37,500 from holding Lewis Group Limited or generate 4.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Harmony Gold Mining vs. Lewis Group Limited
Performance |
Timeline |
Harmony Gold Mining |
Lewis Group Limited |
Harmony Gold and Lewis Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Lewis Group
The main advantage of trading using opposite Harmony Gold and Lewis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Lewis Group 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 Lewis Group will offset losses from the drop in Lewis Group's long position.Harmony Gold vs. Capitec Bank Holdings | Harmony Gold vs. Boxer Retail | Harmony Gold vs. RCL Foods | Harmony Gold vs. Trematon Capital Investments |
Lewis Group vs. MC Mining | Lewis Group vs. AfroCentric Investment Corp | Lewis Group vs. City Lodge Hotels | Lewis Group vs. Lesaka Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |