Correlation Between Harmony Gold and BitFuFu Warrant

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

Diversification Opportunities for Harmony Gold and BitFuFu Warrant

-0.45

Correlation Coefficient

Harmony Gold  BitFuFu Warrant

Very good diversification

The 3 months correlation between Harmony and BitFuFu is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and BitFuFu Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Warrant 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 BitFuFu Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Warrant has no effect on the direction of Harmony Gold i.e., Harmony Gold and BitFuFu Warrant go up and down completely randomly.

Pair Corralation between Harmony Gold and BitFuFu Warrant

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the BitFuFu Warrant. But the pink sheet apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 2.08 times less risky than BitFuFu Warrant. The pink sheet trades about -0.09 of its potential returns per unit of risk. The BitFuFu Warrant is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  43.00  in BitFuFu Warrant on October 25, 2024 and sell it today you would earn a total of  0.00  from holding BitFuFu Warrant or generate 0.0% 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.  BitFuFu Warrant

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 fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BitFuFu Warrant

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Warrant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, BitFuFu Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and BitFuFu Warrant

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

The idea behind Harmony Gold Mining and BitFuFu Warrant 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.