Correlation Between Astral Foods and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Astral Foods 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 Astral Foods and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Harmony Gold Mining, you can compare the effects of market volatilities on Astral Foods 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 Astral Foods with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Harmony Gold.
Diversification Opportunities for Astral Foods and Harmony Gold
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astral and Harmony is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods 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 Astral Foods 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 Astral Foods 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 Astral Foods i.e., Astral Foods and Harmony Gold go up and down completely randomly.
Pair Corralation between Astral Foods and Harmony Gold
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.6 times more return on investment than Harmony Gold. However, Astral Foods is 1.66 times less risky than Harmony Gold. It trades about 0.29 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.28 per unit of risk. If you would invest 1,725,000 in Astral Foods on August 24, 2024 and sell it today you would earn a total of 173,700 from holding Astral Foods or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods vs. Harmony Gold Mining
Performance |
| Timeline |
| Astral Foods |
| Harmony Gold Mining |
Astral Foods and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Harmony Gold
The main advantage of trading using opposite Astral Foods and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods 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.| Astral Foods vs. Prosus NV | Astral Foods vs. Compagnie Financire Richemont | Astral Foods vs. British American Tobacco | Astral Foods vs. Glencore PLC |
| Harmony Gold vs. Gold Fields | Harmony Gold vs. Sibanye Stillwater | Harmony Gold vs. Pan African Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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