Correlation Between Harmony Gold and 37940XAN2

Can any of the company-specific risk be diversified away by investing in both Harmony Gold and 37940XAN2 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 37940XAN2 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 GPN 53 15 AUG 29, you can compare the effects of market volatilities on Harmony Gold and 37940XAN2 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 37940XAN2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and 37940XAN2.

Diversification Opportunities for Harmony Gold and 37940XAN2

-0.12

Correlation Coefficient

Harmony Gold  37940XAN2

Good diversification

The 3 months correlation between Harmony and 37940XAN2 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and GPN 53 15 AUG 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPN 53 15 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 37940XAN2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPN 53 15 has no effect on the direction of Harmony Gold i.e., Harmony Gold and 37940XAN2 go up and down completely randomly.

Pair Corralation between Harmony Gold and 37940XAN2

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 8.23 times more return on investment than 37940XAN2. However, Harmony Gold is 8.23 times more volatile than GPN 53 15 AUG 29. It trades about 0.08 of its potential returns per unit of risk. GPN 53 15 AUG 29 is currently generating about -0.02 per unit of risk. If you would invest  636.00  in Harmony Gold Mining on September 13, 2024 and sell it today you would earn a total of  314.00  from holding Harmony Gold Mining or generate 49.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.14%
Values	Daily Returns

Harmony Gold Mining  vs.  GPN 53 15 AUG 29

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 nearly stable fundamental indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GPN 53 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GPN 53 15 AUG 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 37940XAN2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harmony Gold and 37940XAN2

The main advantage of trading using opposite Harmony Gold and 37940XAN2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, 37940XAN2 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 37940XAN2 will offset losses from the drop in 37940XAN2's long position.

The idea behind Harmony Gold Mining and GPN 53 15 AUG 29 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 Transaction History module to view history of all your transactions and understand their impact on performance.