Correlation Between Harmony Gold and MTN
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and MTN 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 MTN 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 MTN Group, you can compare the effects of market volatilities on Harmony Gold and MTN 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 MTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and MTN.
Diversification Opportunities for Harmony Gold and MTN
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and MTN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and MTN Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN 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 MTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Harmony Gold i.e., Harmony Gold and MTN go up and down completely randomly.
Pair Corralation between Harmony Gold and MTN
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the MTN. In addition to that, Harmony Gold is 2.26 times more volatile than MTN Group. It trades about -0.26 of its total potential returns per unit of risk. MTN Group is currently generating about -0.3 per unit of volatility. If you would invest 886,100 in MTN Group on August 28, 2024 and sell it today you would lose (73,700) from holding MTN Group or give up 8.32% 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. MTN Group
Performance |
| Timeline |
| Harmony Gold Mining |
| MTN Group |
Harmony Gold and MTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and MTN
The main advantage of trading using opposite Harmony Gold and MTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, MTN 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 MTN will offset losses from the drop in MTN's long position.| Harmony Gold vs. eMedia Holdings Limited | Harmony Gold vs. Frontier Transport Holdings | Harmony Gold vs. Standard Bank Group | Harmony Gold vs. CA Sales Holdings |
| MTN vs. CA Sales Holdings | MTN vs. Harmony Gold Mining | MTN vs. Trematon Capital Investments | MTN vs. Brimstone Investment |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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