Correlation Between Harmony Gold and African Media
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and African Media 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 African Media 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 African Media Entertainment, you can compare the effects of market volatilities on Harmony Gold and African Media 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 African Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and African Media.
Diversification Opportunities for Harmony Gold and African Media
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and African is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and African Media Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Media Entert 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 African Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Media Entert has no effect on the direction of Harmony Gold i.e., Harmony Gold and African Media go up and down completely randomly.
Pair Corralation between Harmony Gold and African Media
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.21 times more return on investment than African Media. However, Harmony Gold is 1.21 times more volatile than African Media Entertainment. It trades about 0.71 of its potential returns per unit of risk. African Media Entertainment is currently generating about -0.03 per unit of risk. If you would invest 1,603,500 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 540,400 from holding Harmony Gold Mining or generate 33.7% 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. African Media Entertainment
Performance |
| Timeline |
| Harmony Gold Mining |
| African Media Entert |
Harmony Gold and African Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and African Media
The main advantage of trading using opposite Harmony Gold and African Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, African Media 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 African Media will offset losses from the drop in African Media's long position.| Harmony Gold vs. RCL Foods | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. Copper 360 |
| African Media vs. Sasol Ltd Bee | African Media vs. Sabvest Capital | African Media vs. Growthpoint Properties | African Media vs. Coronation Global Equity |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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