Correlation Between Harmony Gold and Datatec
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Datatec 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 Datatec 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 Datatec, you can compare the effects of market volatilities on Harmony Gold and Datatec 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 Datatec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Datatec.
Diversification Opportunities for Harmony Gold and Datatec
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Datatec is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Datatec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datatec 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 Datatec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datatec has no effect on the direction of Harmony Gold i.e., Harmony Gold and Datatec go up and down completely randomly.
Pair Corralation between Harmony Gold and Datatec
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.29 times more return on investment than Datatec. However, Harmony Gold is 1.29 times more volatile than Datatec. It trades about 0.64 of its potential returns per unit of risk. Datatec is currently generating about 0.09 per unit of risk. If you would invest 1,603,500 in Harmony Gold Mining on November 2, 2024 and sell it today you would earn a total of 480,500 from holding Harmony Gold Mining or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Datatec
Performance |
| Timeline |
| Harmony Gold Mining |
| Datatec |
Harmony Gold and Datatec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Datatec
The main advantage of trading using opposite Harmony Gold and Datatec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Datatec 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 Datatec will offset losses from the drop in Datatec's long position.| Harmony Gold vs. RCL Foods | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. Copper 360 |
| Datatec vs. Standard Bank Group | Datatec vs. Hosken Consolidated Investments | Datatec vs. Safari Investments RSA | Datatec vs. Reinet Investments SCA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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