Correlation Between Harmony Gold and Gold Bull
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Gold Bull 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 Gold Bull 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 Gold Bull Resources, you can compare the effects of market volatilities on Harmony Gold and Gold Bull 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 Gold Bull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Gold Bull.
Diversification Opportunities for Harmony Gold and Gold Bull
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harmony and Gold is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Gold Bull Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bull Resources 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 Gold Bull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bull Resources has no effect on the direction of Harmony Gold i.e., Harmony Gold and Gold Bull go up and down completely randomly.
Pair Corralation between Harmony Gold and Gold Bull
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.78 times more return on investment than Gold Bull. However, Harmony Gold Mining is 1.28 times less risky than Gold Bull. It trades about -0.18 of its potential returns per unit of risk. Gold Bull Resources is currently generating about -0.42 per unit of risk. If you would invest 1,055 in Harmony Gold Mining on September 3, 2024 and sell it today you would lose (136.00) from holding Harmony Gold Mining or give up 12.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Gold Bull Resources
Performance |
| Timeline |
| Harmony Gold Mining |
| Gold Bull Resources |
Harmony Gold and Gold Bull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Gold Bull
The main advantage of trading using opposite Harmony Gold and Gold Bull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Gold Bull 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 Gold Bull will offset losses from the drop in Gold Bull'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 |
| Gold Bull vs. Harmony Gold Mining | Gold Bull vs. SPACE | Gold Bull vs. T Rowe Price | Gold Bull vs. Ampleforth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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