Correlation Between Harmony Gold and Apartment Investment

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

Diversification Opportunities for Harmony Gold and Apartment Investment

0.35

Correlation Coefficient

Harmony Gold  Apartment Investment

Weak diversification

The 3 months correlation between Harmony and Apartment is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and 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 Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Harmony Gold i.e., Harmony Gold and Apartment Investment go up and down completely randomly.

Pair Corralation between Harmony Gold and Apartment Investment

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 2.49 times more return on investment than Apartment Investment. However, Harmony Gold is 2.49 times more volatile than Apartment Investment and. It trades about 0.21 of its potential returns per unit of risk. Apartment Investment and is currently generating about 0.14 per unit of risk. If you would invest  827.00  in Harmony Gold Mining on December 21, 2024 and sell it today you would earn a total of  423.00  from holding Harmony Gold Mining or generate 51.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.05%
Values	Daily Returns

Harmony Gold Mining  vs.  Apartment Investment and

Harmony Gold Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Harmony Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Apartment Investment and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and Apartment Investment

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

The idea behind Harmony Gold Mining and Apartment Investment and 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.