Correlation Between Harmony Gold and AH Vest
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and AH Vest 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 AH Vest 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 AH Vest Limited, you can compare the effects of market volatilities on Harmony Gold and AH Vest 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 AH Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and AH Vest.
Diversification Opportunities for Harmony Gold and AH Vest
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and AHL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited 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 AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Harmony Gold i.e., Harmony Gold and AH Vest go up and down completely randomly.
Pair Corralation between Harmony Gold and AH Vest
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.11 times more return on investment than AH Vest. However, Harmony Gold is 1.11 times more volatile than AH Vest Limited. It trades about 0.07 of its potential returns per unit of risk. AH Vest Limited is currently generating about -0.03 per unit of risk. If you would invest 860,000 in Harmony Gold Mining on September 2, 2024 and sell it today you would earn a total of 790,000 from holding Harmony Gold Mining or generate 91.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Harmony Gold Mining vs. AH Vest Limited
Performance |
| Timeline |
| Harmony Gold Mining |
| AH Vest Limited |
Harmony Gold and AH Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and AH Vest
The main advantage of trading using opposite Harmony Gold and AH Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, AH Vest 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 AH Vest will offset losses from the drop in AH Vest's long position.The idea behind Harmony Gold Mining and AH Vest Limited 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.| AH Vest vs. Brimstone Investment | AH Vest vs. We Buy Cars | AH Vest vs. CA Sales Holdings | AH Vest vs. Safari Investments RSA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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