Correlation Between Agrometal SAI and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI 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 Agrometal SAI and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Harmony Gold Mining, you can compare the effects of market volatilities on Agrometal SAI 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 Agrometal SAI with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Harmony Gold.
Diversification Opportunities for Agrometal SAI and Harmony Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agrometal and Harmony is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI 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 Agrometal SAI 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 Agrometal SAI 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 Agrometal SAI i.e., Agrometal SAI and Harmony Gold go up and down completely randomly.
Pair Corralation between Agrometal SAI and Harmony Gold
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 1.35 times less return on investment than Harmony Gold. In addition to that, Agrometal SAI is 1.55 times more volatile than Harmony Gold Mining. It trades about 0.07 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.14 per unit of volatility. If you would invest 113,900 in Harmony Gold Mining on August 26, 2024 and sell it today you would earn a total of 956,100 from holding Harmony Gold Mining or generate 839.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. Harmony Gold Mining
Performance |
| Timeline |
| Agrometal SAI |
| Harmony Gold Mining |
Agrometal SAI and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Harmony Gold
The main advantage of trading using opposite Agrometal SAI and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI 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.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Compania de Transporte |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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