Correlation Between Harmony Gold and Transportadora
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Harmony Gold and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Transportadora.
Diversification Opportunities for Harmony Gold and Transportadora
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harmony and Transportadora is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Harmony Gold i.e., Harmony Gold and Transportadora go up and down completely randomly.
Pair Corralation between Harmony Gold and Transportadora
Assuming the 90 days trading horizon Harmony Gold is expected to generate 1.14 times less return on investment than Transportadora. But when comparing it to its historical volatility, Harmony Gold Mining is 1.06 times less risky than Transportadora. It trades about 0.12 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 84,250 in Transportadora de Gas on September 12, 2024 and sell it today you would earn a total of 310,250 from holding Transportadora de Gas or generate 368.25% 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. Transportadora de Gas
Performance |
| Timeline |
| Harmony Gold Mining |
| Transportadora de Gas |
Harmony Gold and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Transportadora
The main advantage of trading using opposite Harmony Gold and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Harmony Gold vs. Edesa Holding SA | Harmony Gold vs. Vista Energy, SAB | Harmony Gold vs. United States Steel | Harmony Gold vs. Pfizer Inc |
| Transportadora vs. Agrometal SAI | Transportadora vs. Transportadora de Gas | Transportadora vs. Harmony Gold Mining | Transportadora vs. Telecom Argentina |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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