Correlation Between Harmony Gold and GLENLN

Can any of the company-specific risk be diversified away by investing in both Harmony Gold and GLENLN 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 GLENLN 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 GLENLN 4 16 APR 25, you can compare the effects of market volatilities on Harmony Gold and GLENLN 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 GLENLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and GLENLN.

Diversification Opportunities for Harmony Gold and GLENLN

0.55

Correlation Coefficient

Harmony Gold  GLENLN

Very weak diversification

The 3 months correlation between Harmony and GLENLN is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and GLENLN 4 16 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLENLN 4 16 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 GLENLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLENLN 4 16 has no effect on the direction of Harmony Gold i.e., Harmony Gold and GLENLN go up and down completely randomly.

Pair Corralation between Harmony Gold and GLENLN

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 6.21 times more return on investment than GLENLN. However, Harmony Gold is 6.21 times more volatile than GLENLN 4 16 APR 25. It trades about 0.24 of its potential returns per unit of risk. GLENLN 4 16 APR 25 is currently generating about -0.17 per unit of risk. If you would invest  827.00  in Harmony Gold Mining on November 29, 2024 and sell it today you would earn a total of  373.00  from holding Harmony Gold Mining or generate 45.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	51.52%
Values	Daily Returns

Harmony Gold Mining  vs.  GLENLN 4 16 APR 25

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 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Harmony Gold reported solid returns over the last few months and may actually be approaching a breakup point.

GLENLN 4 16

Risk-Adjusted Performance

Very Weak

Over the last 90 days GLENLN 4 16 APR 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for GLENLN 4 16 APR 25 investors.

Pair Trading with Harmony Gold and GLENLN

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

The idea behind Harmony Gold Mining and GLENLN 4 16 APR 25 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.