Correlation Between Harmony Gold and Goldshore Resources
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Goldshore Resources 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 Goldshore Resources 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 Goldshore Resources, you can compare the effects of market volatilities on Harmony Gold and Goldshore Resources 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 Goldshore Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Goldshore Resources.
Diversification Opportunities for Harmony Gold and Goldshore Resources
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harmony and Goldshore is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Goldshore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldshore 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 Goldshore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldshore Resources has no effect on the direction of Harmony Gold i.e., Harmony Gold and Goldshore Resources go up and down completely randomly.
Pair Corralation between Harmony Gold and Goldshore Resources
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 0.63 times more return on investment than Goldshore Resources. However, Harmony Gold Mining is 1.58 times less risky than Goldshore Resources. It trades about -0.22 of its potential returns per unit of risk. Goldshore Resources is currently generating about -0.21 per unit of risk. If you would invest 1,055 in Harmony Gold Mining on September 4, 2024 and sell it today you would lose (163.00) from holding Harmony Gold Mining or give up 15.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Harmony Gold Mining vs. Goldshore Resources
Performance |
| Timeline |
| Harmony Gold Mining |
| Goldshore Resources |
Harmony Gold and Goldshore Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Goldshore Resources
The main advantage of trading using opposite Harmony Gold and Goldshore Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Goldshore Resources 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 Goldshore Resources will offset losses from the drop in Goldshore Resources' 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 |
| Goldshore Resources vs. Red Pine Exploration | Goldshore Resources vs. Grande Portage Resources | Goldshore Resources vs. Tectonic Metals | Goldshore Resources vs. Puma Exploration |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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