Correlation Between Harmony Gold and Latamgrowth SPAC

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

Diversification Opportunities for Harmony Gold and Latamgrowth SPAC

-0.53

Correlation Coefficient

Harmony Gold  Latamgrowth SPAC

Excellent diversification

The 3 months correlation between Harmony and Latamgrowth is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit 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 Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of Harmony Gold i.e., Harmony Gold and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between Harmony Gold and Latamgrowth SPAC

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Latamgrowth SPAC. But the pink sheet apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 1.33 times less risky than Latamgrowth SPAC. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Latamgrowth SPAC Unit is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,156  in Latamgrowth SPAC Unit on October 26, 2024 and sell it today you would lose (11.00) from holding Latamgrowth SPAC Unit or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.22%
Values	Daily Returns

Harmony Gold Mining  vs.  Latamgrowth SPAC Unit

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.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Latamgrowth SPAC Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Latamgrowth SPAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Harmony Gold and Latamgrowth SPAC

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

The idea behind Harmony Gold Mining and Latamgrowth SPAC Unit 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.