Correlation Between Harmony Gold and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Sapiens International 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 Sapiens International 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 Sapiens International, you can compare the effects of market volatilities on Harmony Gold and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Sapiens International.
Diversification Opportunities for Harmony Gold and Sapiens International
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Sapiens is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Harmony Gold i.e., Harmony Gold and Sapiens International go up and down completely randomly.
Pair Corralation between Harmony Gold and Sapiens International
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 1.51 times more return on investment than Sapiens International. However, Harmony Gold is 1.51 times more volatile than Sapiens International. It trades about 0.08 of its potential returns per unit of risk. Sapiens International is currently generating about 0.03 per unit of risk. If you would invest 636.00 in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of 314.00 from holding Harmony Gold Mining or generate 49.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.83% |
| Values | Daily Returns |
Harmony Gold Mining vs. Sapiens International
Performance |
| Timeline |
| Harmony Gold Mining |
| Sapiens International |
Harmony Gold and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Sapiens International
The main advantage of trading using opposite Harmony Gold and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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