Correlation Between Harmony Gold and Baru Gold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Baru Gold 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 Baru Gold 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 Baru Gold Corp, you can compare the effects of market volatilities on Harmony Gold and Baru Gold 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 Baru Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Baru Gold.
Diversification Opportunities for Harmony Gold and Baru Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and Baru is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Baru Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baru Gold Corp 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 Baru Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baru Gold Corp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Baru Gold go up and down completely randomly.
Pair Corralation between Harmony Gold and Baru Gold
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Baru Gold. But the stock apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 5.17 times less risky than Baru Gold. The stock trades about -0.21 of its potential returns per unit of risk. The Baru Gold Corp is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1.29 in Baru Gold Corp on September 4, 2024 and sell it today you would earn a total of 3.50 from holding Baru Gold Corp or generate 271.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Harmony Gold Mining vs. Baru Gold Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| Baru Gold Corp |
Harmony Gold and Baru Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Baru Gold
The main advantage of trading using opposite Harmony Gold and Baru Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Baru Gold 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 Baru Gold will offset losses from the drop in Baru Gold's 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 |
| Baru Gold vs. Allegiant Gold | Baru Gold vs. 1911 Gold Corp | Baru Gold vs. Altamira Gold Corp | Baru Gold vs. Gold Terra Resource |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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