Correlation Between Harmony Gold and AfroCentric Investment
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and AfroCentric Investment 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 AfroCentric Investment 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 AfroCentric Investment Corp, you can compare the effects of market volatilities on Harmony Gold and AfroCentric Investment 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 AfroCentric Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and AfroCentric Investment.
Diversification Opportunities for Harmony Gold and AfroCentric Investment
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and AfroCentric is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and AfroCentric Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfroCentric Investment 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 AfroCentric Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfroCentric Investment has no effect on the direction of Harmony Gold i.e., Harmony Gold and AfroCentric Investment go up and down completely randomly.
Pair Corralation between Harmony Gold and AfroCentric Investment
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.54 times more return on investment than AfroCentric Investment. However, Harmony Gold Mining is 1.84 times less risky than AfroCentric Investment. It trades about 0.08 of its potential returns per unit of risk. AfroCentric Investment Corp is currently generating about -0.04 per unit of risk. If you would invest 1,683,000 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 460,900 from holding Harmony Gold Mining or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. AfroCentric Investment Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| AfroCentric Investment |
Harmony Gold and AfroCentric Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and AfroCentric Investment
The main advantage of trading using opposite Harmony Gold and AfroCentric Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, AfroCentric Investment 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 AfroCentric Investment will offset losses from the drop in AfroCentric Investment's long position.| Harmony Gold vs. RCL Foods | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. Copper 360 |
| AfroCentric Investment vs. British American Tobacco | AfroCentric Investment vs. Advtech | AfroCentric Investment vs. Reinet Investments SCA | AfroCentric Investment vs. Bytes Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets |