Correlation Between Harmony Gold and ATT

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Can any of the company-specific risk be diversified away by investing in both Harmony Gold and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Harmony Gold and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and ATT.

Diversification Opportunities for Harmony Gold and ATT

-0.71
  Correlation Coefficient
 ATT

Pay attention - limited upside

The 3 months correlation between Harmony and ATT is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Harmony Gold i.e., Harmony Gold and ATT go up and down completely randomly.

Pair Corralation between Harmony Gold and ATT

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.88 times more return on investment than ATT. However, Harmony Gold is 1.88 times more volatile than ATT Inc. It trades about 0.54 of its potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of risk. If you would invest  770.00  in Harmony Gold Mining on October 26, 2024 and sell it today you would earn a total of  220.00  from holding Harmony Gold Mining or generate 28.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Harmony Gold Mining  vs.  ATT Inc

 Performance 
       Timeline  
Harmony Gold Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
ATT Inc 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Harmony Gold and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harmony Gold and ATT

The main advantage of trading using opposite Harmony Gold and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
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The idea behind Harmony Gold Mining and ATT Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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