Correlation Between Harmony Gold and Allkem
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Allkem 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 Allkem 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 Allkem, you can compare the effects of market volatilities on Harmony Gold and Allkem 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 Allkem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Allkem.
Diversification Opportunities for Harmony Gold and Allkem
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Allkem is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Allkem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allkem 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 Allkem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allkem has no effect on the direction of Harmony Gold i.e., Harmony Gold and Allkem go up and down completely randomly.
Pair Corralation between Harmony Gold and Allkem
If you would invest 848.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 276.50 from holding Harmony Gold Mining or generate 32.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Allkem
Performance |
| Timeline |
| Harmony Gold Mining |
| Allkem |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Harmony Gold and Allkem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Allkem
The main advantage of trading using opposite Harmony Gold and Allkem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Allkem 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 Allkem will offset losses from the drop in Allkem'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 |
| Allkem vs. Golden Energy Offshore | Allkem vs. Helmerich and Payne | Allkem vs. National Storage REIT | Allkem vs. SmartStop Self Storage |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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