Correlation Between Harmony Gold and Boldt SA
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Boldt SA 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 Boldt SA 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 Boldt SA, you can compare the effects of market volatilities on Harmony Gold and Boldt SA 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 Boldt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Boldt SA.
Diversification Opportunities for Harmony Gold and Boldt SA
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Harmony and Boldt is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Boldt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boldt SA 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 Boldt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boldt SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Boldt SA go up and down completely randomly.
Pair Corralation between Harmony Gold and Boldt SA
Assuming the 90 days trading horizon Harmony Gold is expected to generate 1.07 times less return on investment than Boldt SA. But when comparing it to its historical volatility, Harmony Gold Mining is 1.38 times less risky than Boldt SA. It trades about 0.14 of its potential returns per unit of risk. Boldt SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Boldt SA on September 14, 2024 and sell it today you would earn a total of 4,626 from holding Boldt SA or generate 686.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Boldt SA
Performance |
| Timeline |
| Harmony Gold Mining |
| Boldt SA |
Harmony Gold and Boldt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Boldt SA
The main advantage of trading using opposite Harmony Gold and Boldt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Boldt SA 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 Boldt SA will offset losses from the drop in Boldt SA's long position.| Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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