Correlation Between Harmony Gold and Aurelius Minerals

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

Diversification Opportunities for Harmony Gold and Aurelius Minerals

0.0

Correlation Coefficient

Harmony Gold  Aurelius Minerals

Pay attention - limited upside

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

Pair Corralation between Harmony Gold and Aurelius Minerals

If you would invest  912.00  in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Harmony Gold Mining or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Harmony Gold Mining  vs.  Aurelius Minerals

Harmony Gold Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Harmony Gold is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Aurelius Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurelius Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aurelius Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Harmony Gold and Aurelius Minerals

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

The idea behind Harmony Gold Mining and Aurelius Minerals 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.