Correlation Between Harmony Gold and Pampa Energia
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Pampa Energia 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 Pampa Energia 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 Pampa Energia SA, you can compare the effects of market volatilities on Harmony Gold and Pampa Energia 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 Pampa Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Pampa Energia.
Diversification Opportunities for Harmony Gold and Pampa Energia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Pampa is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Pampa Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energia 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 Pampa Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energia SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Pampa Energia go up and down completely randomly.
Pair Corralation between Harmony Gold and Pampa Energia
Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.7 times more return on investment than Pampa Energia. However, Harmony Gold Mining is 1.43 times less risky than Pampa Energia. It trades about 0.66 of its potential returns per unit of risk. Pampa Energia SA is currently generating about -0.02 per unit of risk. If you would invest 987,000 in Harmony Gold Mining on November 2, 2024 and sell it today you would earn a total of 350,500 from holding Harmony Gold Mining or generate 35.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harmony Gold Mining vs. Pampa Energia SA
Performance |
| Timeline |
| Harmony Gold Mining |
| Pampa Energia SA |
Harmony Gold and Pampa Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Pampa Energia
The main advantage of trading using opposite Harmony Gold and Pampa Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Pampa Energia 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 Pampa Energia will offset losses from the drop in Pampa Energia's long position.| Harmony Gold vs. Telecom Argentina | Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. Agrometal SAI |
| Pampa Energia vs. Transportadora de Gas | Pampa Energia vs. Compania de Transporte | Pampa Energia vs. United States Steel | Pampa Energia vs. Harmony Gold Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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