Correlation Between Harmony Gold and Abcourt Mines
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Abcourt Mines 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 Abcourt Mines 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 Abcourt Mines, you can compare the effects of market volatilities on Harmony Gold and Abcourt Mines 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 Abcourt Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Abcourt Mines.
Diversification Opportunities for Harmony Gold and Abcourt Mines
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Abcourt is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Abcourt Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcourt Mines 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 Abcourt Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcourt Mines has no effect on the direction of Harmony Gold i.e., Harmony Gold and Abcourt Mines go up and down completely randomly.
Pair Corralation between Harmony Gold and Abcourt Mines
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.21 times more return on investment than Abcourt Mines. However, Harmony Gold Mining is 4.77 times less risky than Abcourt Mines. It trades about -0.01 of its potential returns per unit of risk. Abcourt Mines is currently generating about -0.03 per unit of risk. If you would invest 936.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would lose (15.00) from holding Harmony Gold Mining or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Abcourt Mines
Performance |
| Timeline |
| Harmony Gold Mining |
| Abcourt Mines |
Harmony Gold and Abcourt Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Abcourt Mines
The main advantage of trading using opposite Harmony Gold and Abcourt Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Abcourt Mines 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 Abcourt Mines will offset losses from the drop in Abcourt Mines' long position.| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
| Abcourt Mines vs. Revival Gold | Abcourt Mines vs. Galiano Gold | Abcourt Mines vs. US Gold Corp | Abcourt Mines vs. HUMANA INC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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