Correlation Between Harmony Gold and Aspen Pharmacare
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Aspen Pharmacare 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 Aspen Pharmacare 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 Aspen Pharmacare Holdings, you can compare the effects of market volatilities on Harmony Gold and Aspen Pharmacare 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 Aspen Pharmacare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Aspen Pharmacare.
Diversification Opportunities for Harmony Gold and Aspen Pharmacare
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Aspen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Aspen Pharmacare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Pharmacare Holdings 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 Aspen Pharmacare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Pharmacare Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and Aspen Pharmacare go up and down completely randomly.
Pair Corralation between Harmony Gold and Aspen Pharmacare
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Aspen Pharmacare. In addition to that, Harmony Gold is 1.52 times more volatile than Aspen Pharmacare Holdings. It trades about -0.24 of its total potential returns per unit of risk. Aspen Pharmacare Holdings is currently generating about -0.25 per unit of volatility. If you would invest 1,805,600 in Aspen Pharmacare Holdings on December 1, 2024 and sell it today you would lose (172,600) from holding Aspen Pharmacare Holdings or give up 9.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Harmony Gold Mining vs. Aspen Pharmacare Holdings
Performance |
Timeline |
Harmony Gold Mining |
Aspen Pharmacare Holdings |
Harmony Gold and Aspen Pharmacare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Aspen Pharmacare
The main advantage of trading using opposite Harmony Gold and Aspen Pharmacare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Aspen Pharmacare 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 Aspen Pharmacare will offset losses from the drop in Aspen Pharmacare's long position.Harmony Gold vs. Frontier Transport Holdings | Harmony Gold vs. Life Healthcare | Harmony Gold vs. Zeder Investments | Harmony Gold vs. RCL Foods |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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