Correlation Between Harmony Gold and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Thungela Resources 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 Thungela Resources 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 Thungela Resources Limited, you can compare the effects of market volatilities on Harmony Gold and Thungela Resources 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 Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Thungela Resources.
Diversification Opportunities for Harmony Gold and Thungela Resources
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Thungela is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources 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 Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Harmony Gold i.e., Harmony Gold and Thungela Resources go up and down completely randomly.
Pair Corralation between Harmony Gold and Thungela Resources
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.4 times more return on investment than Thungela Resources. However, Harmony Gold is 1.4 times more volatile than Thungela Resources Limited. It trades about 0.34 of its potential returns per unit of risk. Thungela Resources Limited is currently generating about -0.05 per unit of risk. If you would invest 1,577,200 in Harmony Gold Mining on October 21, 2024 and sell it today you would earn a total of 265,800 from holding Harmony Gold Mining or generate 16.85% 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. Thungela Resources Limited
Performance |
| Timeline |
| Harmony Gold Mining |
| Thungela Resources |
Harmony Gold and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Thungela Resources
The main advantage of trading using opposite Harmony Gold and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Thungela Resources 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 Thungela Resources will offset losses from the drop in Thungela Resources' long position.| Harmony Gold vs. CA Sales Holdings | Harmony Gold vs. Brimstone Investment | Harmony Gold vs. Deneb Investments | Harmony Gold vs. Datatec |
| Thungela Resources vs. Frontier Transport Holdings | Thungela Resources vs. Harmony Gold Mining | Thungela Resources vs. Safari Investments RSA | Thungela Resources vs. Boxer Retail |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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