Correlation Between Harmony Gold and Empresa Distribuidora

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

Diversification Opportunities for Harmony Gold and Empresa Distribuidora

0.0

Correlation Coefficient

Harmony Gold  Empresa Distribuidora

Pay attention - limited upside

The 3 months correlation between Harmony and Empresa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Empresa Distribuidora Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Distribuidora 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 Empresa Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Distribuidora has no effect on the direction of Harmony Gold i.e., Harmony Gold and Empresa Distribuidora go up and down completely randomly.

Pair Corralation between Harmony Gold and Empresa Distribuidora

If you would invest  136,600  in Harmony Gold Mining on October 10, 2024 and sell it today you would earn a total of  870,900  from holding Harmony Gold Mining or generate 637.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.38%
Values	Daily Returns

Harmony Gold Mining  vs.  Empresa Distribuidora Electric

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Empresa Distribuidora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Empresa Distribuidora Electrica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Empresa Distribuidora 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 Empresa Distribuidora

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

The idea behind Harmony Gold Mining and Empresa Distribuidora Electrica 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.