Correlation Between Vista Energy, and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both Vista Energy, and Harmony Gold 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 Vista Energy, and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vista Energy, SAB and Harmony Gold Mining, you can compare the effects of market volatilities on Vista Energy, and Harmony Gold 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 Vista Energy, with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Energy, and Harmony Gold.

Diversification Opportunities for Vista Energy, and Harmony Gold

-0.56

Correlation Coefficient

Vista Energy,  Harmony Gold

Excellent diversification

The 3 months correlation between Vista and Harmony is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vista Energy, SAB and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and Vista Energy, 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 Vista Energy, SAB are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Vista Energy, i.e., Vista Energy, and Harmony Gold go up and down completely randomly.

Pair Corralation between Vista Energy, and Harmony Gold

Assuming the 90 days trading horizon Vista Energy, SAB is expected to generate 0.87 times more return on investment than Harmony Gold. However, Vista Energy, SAB is 1.15 times less risky than Harmony Gold. It trades about -0.07 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.2 per unit of risk. If you would invest  1,785  in Vista Energy, SAB on December 3, 2024 and sell it today you would lose (90.00) from holding Vista Energy, SAB or give up 5.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vista Energy, SAB  vs.  Harmony Gold Mining

Vista Energy, SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vista Energy, SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Harmony Gold Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harmony Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vista Energy, and Harmony Gold

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

The idea behind Vista Energy, SAB and Harmony Gold Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.