Correlation Between Harmony Gold and Paysafe

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

Diversification Opportunities for Harmony Gold and Paysafe

0.54

Correlation Coefficient

Harmony Gold  Paysafe

Very weak diversification

The 3 months correlation between Harmony and Paysafe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of Harmony Gold i.e., Harmony Gold and Paysafe go up and down completely randomly.

Pair Corralation between Harmony Gold and Paysafe

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.0 times more return on investment than Paysafe. However, Harmony Gold is 1.0 times more volatile than Paysafe. It trades about 0.1 of its potential returns per unit of risk. Paysafe is currently generating about 0.0 per unit of risk. If you would invest  372.00  in Harmony Gold Mining on September 27, 2024 and sell it today you would earn a total of  578.00  from holding Harmony Gold Mining or generate 155.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	63.94%
Values	Daily Returns

Harmony Gold Mining  vs.  Paysafe

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 latest conflicting performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Paysafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysafe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Harmony Gold and Paysafe

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

The idea behind Harmony Gold Mining and Paysafe 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.