Correlation Between Harmony Gold and PERENNIAL ENERGY
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and PERENNIAL ENERGY 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 PERENNIAL ENERGY 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 PERENNIAL ENERGY HD 01, you can compare the effects of market volatilities on Harmony Gold and PERENNIAL ENERGY 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 PERENNIAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and PERENNIAL ENERGY.
Diversification Opportunities for Harmony Gold and PERENNIAL ENERGY
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harmony and PERENNIAL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and PERENNIAL ENERGY HD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PERENNIAL ENERGY 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 PERENNIAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PERENNIAL ENERGY has no effect on the direction of Harmony Gold i.e., Harmony Gold and PERENNIAL ENERGY go up and down completely randomly.
Pair Corralation between Harmony Gold and PERENNIAL ENERGY
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.63 times more return on investment than PERENNIAL ENERGY. However, Harmony Gold Mining is 1.59 times less risky than PERENNIAL ENERGY. It trades about 0.13 of its potential returns per unit of risk. PERENNIAL ENERGY HD 01 is currently generating about -0.15 per unit of risk. If you would invest 835.00 in Harmony Gold Mining on October 15, 2024 and sell it today you would earn a total of 45.00 from holding Harmony Gold Mining or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. PERENNIAL ENERGY HD 01
Performance |
| Timeline |
| Harmony Gold Mining |
| PERENNIAL ENERGY |
Harmony Gold and PERENNIAL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and PERENNIAL ENERGY
The main advantage of trading using opposite Harmony Gold and PERENNIAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, PERENNIAL ENERGY 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 PERENNIAL ENERGY will offset losses from the drop in PERENNIAL ENERGY's long position.| Harmony Gold vs. FIRST SAVINGS FINL | Harmony Gold vs. Genco Shipping Trading | Harmony Gold vs. DELTA AIR LINES | Harmony Gold vs. Wizz Air Holdings |
| PERENNIAL ENERGY vs. COSMOSTEEL HLDGS | PERENNIAL ENERGY vs. Tencent Music Entertainment | PERENNIAL ENERGY vs. SQUIRREL MEDIA SA | PERENNIAL ENERGY vs. Live Nation Entertainment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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