Correlation Between Harmony Gold and Sebata Holdings
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sebata 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 Sebata 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 Sebata Holdings, you can compare the effects of market volatilities on Harmony Gold and Sebata 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 Sebata Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sebata Holdings.
Diversification Opportunities for Harmony Gold and Sebata Holdings
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Sebata is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sebata Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebata 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 Sebata Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebata Holdings has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sebata Holdings go up and down completely randomly.
Pair Corralation between Harmony Gold and Sebata Holdings
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.55 times more return on investment than Sebata Holdings. However, Harmony Gold Mining is 1.82 times less risky than Sebata Holdings. It trades about 0.08 of its potential returns per unit of risk. Sebata Holdings is currently generating about 0.0 per unit of risk. If you would invest 823,200 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 866,100 from holding Harmony Gold Mining or generate 105.21% 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. Sebata Holdings
Performance |
| Timeline |
| Harmony Gold Mining |
| Sebata Holdings |
Harmony Gold and Sebata Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sebata Holdings
The main advantage of trading using opposite Harmony Gold and Sebata Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sebata 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 Sebata Holdings will offset losses from the drop in Sebata Holdings' long position.| Harmony Gold vs. Frontier Transport Holdings | Harmony Gold vs. British American Tobacco | Harmony Gold vs. Master Drilling Group | Harmony Gold vs. MC Mining |
| Sebata Holdings vs. Sasol Ltd Bee | Sebata Holdings vs. Centaur Bci Balanced | Sebata Holdings vs. Sabvest Capital | Sebata Holdings vs. Growthpoint Properties |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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