Correlation Between Harmony Gold and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions International, you can compare the effects of market volatilities on Harmony Gold and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Flexible Solutions.
Diversification Opportunities for Harmony Gold and Flexible Solutions
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harmony and Flexible is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Harmony Gold i.e., Harmony Gold and Flexible Solutions go up and down completely randomly.
Pair Corralation between Harmony Gold and Flexible Solutions
Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Flexible Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 1.36 times less risky than Flexible Solutions. The stock trades about -0.21 of its potential returns per unit of risk. The Flexible Solutions International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Flexible Solutions International on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Flexible Solutions International or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Flexible Solutions Internation
Performance |
| Timeline |
| Harmony Gold Mining |
| Flexible Solutions |
Harmony Gold and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Flexible Solutions
The main advantage of trading using opposite Harmony Gold and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' 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 |
| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |