Correlation Between Ximen Mining and Harmony Gold

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

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

Diversification Opportunities for Ximen Mining and Harmony Gold

0.43

Correlation Coefficient

Ximen Mining  Harmony Gold

Very weak diversification

The 3 months correlation between Ximen and Harmony is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ximen Mining Corp 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 Ximen Mining 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 Ximen Mining Corp 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 Ximen Mining i.e., Ximen Mining and Harmony Gold go up and down completely randomly.

Pair Corralation between Ximen Mining and Harmony Gold

Assuming the 90 days horizon Ximen Mining Corp is expected to generate 5.23 times more return on investment than Harmony Gold. However, Ximen Mining is 5.23 times more volatile than Harmony Gold Mining. It trades about 0.09 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.27 per unit of risk. If you would invest  6.50  in Ximen Mining Corp on December 28, 2024 and sell it today you would earn a total of  2.70  from holding Ximen Mining Corp or generate 41.54% return on investment over 90 days.

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

Ximen Mining Corp  vs.  Harmony Gold Mining

Ximen Mining Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ximen Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Ximen Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Harmony Gold Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Harmony Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ximen Mining and Harmony Gold

The main advantage of trading using opposite Ximen Mining and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ximen Mining 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 Ximen Mining Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.