Correlation Between Harmony Gold and Bidvest
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Bidvest 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 Bidvest 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 Bidvest Group, you can compare the effects of market volatilities on Harmony Gold and Bidvest 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 Bidvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Bidvest.
Diversification Opportunities for Harmony Gold and Bidvest
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Bidvest is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Bidvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bidvest Group 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 Bidvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bidvest Group has no effect on the direction of Harmony Gold i.e., Harmony Gold and Bidvest go up and down completely randomly.
Pair Corralation between Harmony Gold and Bidvest
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Bidvest. In addition to that, Harmony Gold is 2.3 times more volatile than Bidvest Group. It trades about -0.17 of its total potential returns per unit of risk. Bidvest Group is currently generating about -0.13 per unit of volatility. If you would invest 2,860,000 in Bidvest Group on September 5, 2024 and sell it today you would lose (111,000) from holding Bidvest Group or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Bidvest Group
Performance |
| Timeline |
| Harmony Gold Mining |
| Bidvest Group |
Harmony Gold and Bidvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Bidvest
The main advantage of trading using opposite Harmony Gold and Bidvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Bidvest 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 Bidvest will offset losses from the drop in Bidvest's long position.| Harmony Gold vs. E Media Holdings | Harmony Gold vs. Advtech | Harmony Gold vs. Deneb Investments | Harmony Gold vs. Allied Electronics |
| Bidvest vs. Harmony Gold Mining | Bidvest vs. Europa Metals | Bidvest vs. British American Tobacco | Bidvest vs. Afine Investments |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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