Correlation Between Harmony Gold and Trematon Capital
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Trematon Capital 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 Trematon Capital 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 Trematon Capital Investments, you can compare the effects of market volatilities on Harmony Gold and Trematon Capital 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 Trematon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Trematon Capital.
Diversification Opportunities for Harmony Gold and Trematon Capital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Trematon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Trematon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trematon Capital Inv 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 Trematon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trematon Capital Inv has no effect on the direction of Harmony Gold i.e., Harmony Gold and Trematon Capital go up and down completely randomly.
Pair Corralation between Harmony Gold and Trematon Capital
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.31 times more return on investment than Trematon Capital. However, Harmony Gold Mining is 3.18 times less risky than Trematon Capital. It trades about 0.64 of its potential returns per unit of risk. Trematon Capital Investments is currently generating about -0.11 per unit of risk. If you would invest 1,603,500 in Harmony Gold Mining on November 2, 2024 and sell it today you would earn a total of 480,500 from holding Harmony Gold Mining or generate 29.97% 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. Trematon Capital Investments
Performance |
| Timeline |
| Harmony Gold Mining |
| Trematon Capital Inv |
Harmony Gold and Trematon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Trematon Capital
The main advantage of trading using opposite Harmony Gold and Trematon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Trematon Capital 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 Trematon Capital will offset losses from the drop in Trematon Capital's long position.| Harmony Gold vs. RCL Foods | Harmony Gold vs. Boxer Retail | Harmony Gold vs. Lesaka Technologies | Harmony Gold vs. Copper 360 |
| Trematon Capital vs. Astoria Investments | Trematon Capital vs. Nedbank Group | Trematon Capital vs. Mantengu Mining | Trematon Capital vs. ABSA Bank Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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