Correlation Between Harmony Gold and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and GAMING FAC 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 GAMING FAC 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 GAMING FAC SA, you can compare the effects of market volatilities on Harmony Gold and GAMING FAC 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 GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and GAMING FAC.
Diversification Opportunities for Harmony Gold and GAMING FAC
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harmony and GAMING is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and GAMING FAC go up and down completely randomly.
Pair Corralation between Harmony Gold and GAMING FAC
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.94 times more return on investment than GAMING FAC. However, Harmony Gold Mining is 1.06 times less risky than GAMING FAC. It trades about 0.1 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.05 per unit of risk. If you would invest 291.00 in Harmony Gold Mining on November 6, 2024 and sell it today you would earn a total of 809.00 from holding Harmony Gold Mining or generate 278.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. GAMING FAC SA
Performance |
| Timeline |
| Harmony Gold Mining |
| GAMING FAC SA |
Harmony Gold and GAMING FAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and GAMING FAC
The main advantage of trading using opposite Harmony Gold and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.| Harmony Gold vs. SK TELECOM TDADR | Harmony Gold vs. COMBA TELECOM SYST | Harmony Gold vs. Comba Telecom Systems | Harmony Gold vs. QBE Insurance Group |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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