Correlation Between Harmony Gold and 674599DX0

Can any of the company-specific risk be diversified away by investing in both Harmony Gold and 674599DX0 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 674599DX0 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 OXY 75 01 NOV 96, you can compare the effects of market volatilities on Harmony Gold and 674599DX0 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 674599DX0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and 674599DX0.

Diversification Opportunities for Harmony Gold and 674599DX0

0.63

Correlation Coefficient

Harmony Gold  674599DX0

Poor diversification

The 3 months correlation between Harmony and 674599DX0 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and OXY 75 01 NOV 96 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OXY 75 01 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 674599DX0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OXY 75 01 has no effect on the direction of Harmony Gold i.e., Harmony Gold and 674599DX0 go up and down completely randomly.

Pair Corralation between Harmony Gold and 674599DX0

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.28 times more return on investment than 674599DX0. However, Harmony Gold is 1.28 times more volatile than OXY 75 01 NOV 96. It trades about -0.02 of its potential returns per unit of risk. OXY 75 01 NOV 96 is currently generating about -0.16 per unit of risk. If you would invest  1,033  in Harmony Gold Mining on September 15, 2024 and sell it today you would lose (83.00) from holding Harmony Gold Mining or give up 8.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	45.16%
Values	Daily Returns

Harmony Gold Mining  vs.  OXY 75 01 NOV 96

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.

OXY 75 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OXY 75 01 NOV 96 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for OXY 75 01 NOV 96 investors.

Pair Trading with Harmony Gold and 674599DX0

The main advantage of trading using opposite Harmony Gold and 674599DX0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, 674599DX0 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 674599DX0 will offset losses from the drop in 674599DX0's long position.

The idea behind Harmony Gold Mining and OXY 75 01 NOV 96 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.