Correlation Between Harmony Gold and Grupo Clarin
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Grupo Clarin 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 Grupo Clarin 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 Grupo Clarin SA, you can compare the effects of market volatilities on Harmony Gold and Grupo Clarin 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 Grupo Clarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Grupo Clarin.
Diversification Opportunities for Harmony Gold and Grupo Clarin
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Grupo is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Grupo Clarin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Clarin 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 Grupo Clarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Clarin SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Grupo Clarin go up and down completely randomly.
Pair Corralation between Harmony Gold and Grupo Clarin
Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Grupo Clarin. In addition to that, Harmony Gold is 2.01 times more volatile than Grupo Clarin SA. It trades about -0.3 of its total potential returns per unit of risk. Grupo Clarin SA is currently generating about 0.17 per unit of volatility. If you would invest 240,000 in Grupo Clarin SA on August 28, 2024 and sell it today you would earn a total of 14,500 from holding Grupo Clarin SA or generate 6.04% 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. Grupo Clarin SA
Performance |
| Timeline |
| Harmony Gold Mining |
| Grupo Clarin SA |
Harmony Gold and Grupo Clarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Grupo Clarin
The main advantage of trading using opposite Harmony Gold and Grupo Clarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Grupo Clarin 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 Grupo Clarin will offset losses from the drop in Grupo Clarin's long position.| Harmony Gold vs. Gold Fields Ltd | Harmony Gold vs. Pampa Energia SA | Harmony Gold vs. American Express Co | Harmony Gold vs. United States Steel |
| Grupo Clarin vs. Agrometal SAI | Grupo Clarin vs. Telecom Argentina | Grupo Clarin vs. Compania de Transporte | Grupo Clarin vs. Transportadora de Gas |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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