Correlation Between Harmony Gold and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Cementos Pacasmayo 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 Cementos Pacasmayo 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 Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Harmony Gold and Cementos Pacasmayo 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 Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Cementos Pacasmayo.
Diversification Opportunities for Harmony Gold and Cementos Pacasmayo
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and Cementos is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA 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 Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Harmony Gold and Cementos Pacasmayo
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 2.01 times more return on investment than Cementos Pacasmayo. However, Harmony Gold is 2.01 times more volatile than Cementos Pacasmayo SAA. It trades about 0.08 of its potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.03 per unit of risk. If you would invest 336.00 in Harmony Gold Mining on August 26, 2024 and sell it today you would earn a total of 627.00 from holding Harmony Gold Mining or generate 186.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Harmony Gold Mining |
| Cementos Pacasmayo SAA |
Harmony Gold and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Cementos Pacasmayo
The main advantage of trading using opposite Harmony Gold and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo'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 |
| Cementos Pacasmayo vs. Holcim | Cementos Pacasmayo vs. Lafargeholcim Ltd ADR | Cementos Pacasmayo vs. Eagle Materials | Cementos Pacasmayo vs. James Hardie Industries |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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