Correlation Between Harmony Gold and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI, you can compare the effects of market volatilities on Harmony Gold and Ledesma SAAI 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 Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Ledesma SAAI.
Diversification Opportunities for Harmony Gold and Ledesma SAAI
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Ledesma is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI 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 Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Harmony Gold i.e., Harmony Gold and Ledesma SAAI go up and down completely randomly.
Pair Corralation between Harmony Gold and Ledesma SAAI
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 1.03 times more return on investment than Ledesma SAAI. However, Harmony Gold is 1.03 times more volatile than Ledesma SAAI. It trades about 0.72 of its potential returns per unit of risk. Ledesma SAAI is currently generating about 0.04 per unit of risk. If you would invest 978,000 in Harmony Gold Mining on November 6, 2024 and sell it today you would earn a total of 429,500 from holding Harmony Gold Mining or generate 43.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Ledesma SAAI
Performance |
| Timeline |
| Harmony Gold Mining |
| Ledesma SAAI |
Harmony Gold and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Ledesma SAAI
The main advantage of trading using opposite Harmony Gold and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. United States Steel | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
| Ledesma SAAI vs. Compania de Transporte | Ledesma SAAI vs. Transportadora de Gas | Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. United States Steel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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