Correlation Between Harmony Gold and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on Harmony Gold and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Major Drilling.
Diversification Opportunities for Harmony Gold and Major Drilling
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Major is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Harmony Gold i.e., Harmony Gold and Major Drilling go up and down completely randomly.
Pair Corralation between Harmony Gold and Major Drilling
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.33 times more return on investment than Major Drilling. However, Harmony Gold is 1.33 times more volatile than Major Drilling Group. It trades about 0.09 of its potential returns per unit of risk. Major Drilling Group is currently generating about -0.02 per unit of risk. If you would invest 390.00 in Harmony Gold Mining on January 12, 2025 and sell it today you would earn a total of 959.00 from holding Harmony Gold Mining or generate 245.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Harmony Gold Mining vs. Major Drilling Group
Performance |
| Timeline |
| Harmony Gold Mining |
| Major Drilling Group |
Harmony Gold and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Major Drilling
The main advantage of trading using opposite Harmony Gold and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| Harmony Gold vs. AIR PRODCHEMICALS | Harmony Gold vs. NTG Nordic Transport | Harmony Gold vs. EITZEN CHEMICALS | Harmony Gold vs. SPORTING |
| Major Drilling vs. Eurasia Mining Plc | Major Drilling vs. MINCO SILVER | Major Drilling vs. Harmony Gold Mining | Major Drilling vs. COMPUGROUP MEDICAL V |
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 Stocks Directory module to find actively traded stocks across global markets.
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