Correlation Between Harmony Gold and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Lesaka Technologies 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 Lesaka Technologies 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 Lesaka Technologies, you can compare the effects of market volatilities on Harmony Gold and Lesaka Technologies 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 Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Lesaka Technologies.
Diversification Opportunities for Harmony Gold and Lesaka Technologies
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Lesaka is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies 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 Lesaka Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesaka Technologies has no effect on the direction of Harmony Gold i.e., Harmony Gold and Lesaka Technologies go up and down completely randomly.
Pair Corralation between Harmony Gold and Lesaka Technologies
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Lesaka Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 1.16 times less risky than Lesaka Technologies. The stock trades about -0.28 of its potential returns per unit of risk. The Lesaka Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 880,000 in Lesaka Technologies on August 24, 2024 and sell it today you would earn a total of 20,100 from holding Lesaka Technologies or generate 2.28% 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. Lesaka Technologies
Performance |
| Timeline |
| Harmony Gold Mining |
| Lesaka Technologies |
Harmony Gold and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Lesaka Technologies
The main advantage of trading using opposite Harmony Gold and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Lesaka Technologies 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 Lesaka Technologies will offset losses from the drop in Lesaka Technologies' long position.| Harmony Gold vs. Gold Fields | Harmony Gold vs. Sibanye Stillwater | Harmony Gold vs. Pan African Resources |
| Lesaka Technologies vs. Bytes Technology | Lesaka Technologies vs. Centaur Bci Balanced | Lesaka Technologies vs. Growthpoint Properties | Lesaka Technologies vs. Bowler Metcalf |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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