Correlation Between Harmony Gold and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Aldel Financial 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 Aldel Financial 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 Aldel Financial II, you can compare the effects of market volatilities on Harmony Gold and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Aldel Financial.
Diversification Opportunities for Harmony Gold and Aldel Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Aldel is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Harmony Gold i.e., Harmony Gold and Aldel Financial go up and down completely randomly.
Pair Corralation between Harmony Gold and Aldel Financial
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 34.38 times more return on investment than Aldel Financial. However, Harmony Gold is 34.38 times more volatile than Aldel Financial II. It trades about 0.03 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.0 per unit of risk. If you would invest 871.00 in Harmony Gold Mining on September 2, 2024 and sell it today you would earn a total of 48.00 from holding Harmony Gold Mining or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.02% |
| Values | Daily Returns |
Harmony Gold Mining vs. Aldel Financial II
Performance |
| Timeline |
| Harmony Gold Mining |
| Aldel Financial II |
Harmony Gold and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Aldel Financial
The main advantage of trading using opposite Harmony Gold and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Harmony Gold vs. Fortitude Gold Corp | Harmony Gold vs. New Gold | Harmony Gold vs. Galiano Gold | Harmony Gold vs. GoldMining |
| Aldel Financial vs. Stepan Company | Aldel Financial vs. Apogee Enterprises | Aldel Financial vs. Sphere Entertainment Co | Aldel Financial vs. Radcom |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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