Correlation Between Harmony Gold and YXTCOM GROUP

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

Diversification Opportunities for Harmony Gold and YXTCOM GROUP

-0.06

Correlation Coefficient

Harmony Gold  YXTCOM GROUP

Good diversification

The 3 months correlation between Harmony and YXTCOM is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING 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 YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of Harmony Gold i.e., Harmony Gold and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between Harmony Gold and YXTCOM GROUP

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.43 times more return on investment than YXTCOM GROUP. However, Harmony Gold Mining is 2.31 times less risky than YXTCOM GROUP. It trades about 0.08 of its potential returns per unit of risk. YXTCOM GROUP HOLDING is currently generating about -0.12 per unit of risk. If you would invest  375.00  in Harmony Gold Mining on October 15, 2024 and sell it today you would earn a total of  452.00  from holding Harmony Gold Mining or generate 120.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.48%
Values	Daily Returns

Harmony Gold Mining  vs.  YXTCOM GROUP HOLDING

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 unsteady 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.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YXTCOM GROUP HOLDING are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, YXTCOM GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and YXTCOM GROUP

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

The idea behind Harmony Gold Mining and YXTCOM GROUP HOLDING 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 Global Correlations module to find global opportunities by holding instruments from different markets.