Correlation Between Harmony Gold and EMedia Holdings
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and EMedia Holdings 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 EMedia Holdings 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 eMedia Holdings Limited, you can compare the effects of market volatilities on Harmony Gold and EMedia Holdings 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 EMedia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and EMedia Holdings.
Diversification Opportunities for Harmony Gold and EMedia Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and EMedia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and eMedia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMedia 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 EMedia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMedia Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and EMedia Holdings go up and down completely randomly.
Pair Corralation between Harmony Gold and EMedia Holdings
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the EMedia Holdings. In addition to that, Harmony Gold is 1.57 times more volatile than eMedia Holdings Limited. It trades about -0.19 of its total potential returns per unit of risk. eMedia Holdings Limited is currently generating about -0.04 per unit of volatility. If you would invest 33,600 in eMedia Holdings Limited on September 1, 2024 and sell it today you would lose (600.00) from holding eMedia Holdings Limited or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. eMedia Holdings Limited
Performance |
| Timeline |
| Harmony Gold Mining |
| eMedia Holdings |
Harmony Gold and EMedia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and EMedia Holdings
The main advantage of trading using opposite Harmony Gold and EMedia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, EMedia Holdings 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 EMedia Holdings will offset losses from the drop in EMedia Holdings' long position.| Harmony Gold vs. Allied Electronics | Harmony Gold vs. Afine Investments | Harmony Gold vs. Astoria Investments | Harmony Gold vs. Master Drilling Group |
| EMedia Holdings vs. MultiChoice Group | EMedia Holdings vs. Sasol Ltd Bee | EMedia Holdings vs. Growthpoint Properties | EMedia Holdings vs. AfricaRhodium ETF |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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