Correlation Between Harmony Gold and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Seabridge Gold 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 Seabridge Gold 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 Seabridge Gold, you can compare the effects of market volatilities on Harmony Gold and Seabridge Gold 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 Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Seabridge Gold.
Diversification Opportunities for Harmony Gold and Seabridge Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harmony and Seabridge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold 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 Seabridge Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seabridge Gold has no effect on the direction of Harmony Gold i.e., Harmony Gold and Seabridge Gold go up and down completely randomly.
Pair Corralation between Harmony Gold and Seabridge Gold
Considering the 90-day investment horizon Harmony Gold Mining is expected to generate 1.17 times more return on investment than Seabridge Gold. However, Harmony Gold is 1.17 times more volatile than Seabridge Gold. It trades about -0.28 of its potential returns per unit of risk. Seabridge Gold is currently generating about -0.41 per unit of risk. If you would invest 1,137 in Harmony Gold Mining on August 30, 2024 and sell it today you would lose (230.00) from holding Harmony Gold Mining or give up 20.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Gold Mining vs. Seabridge Gold
Performance |
| Timeline |
| Harmony Gold Mining |
| Seabridge Gold |
Harmony Gold and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Seabridge Gold
The main advantage of trading using opposite Harmony Gold and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Seabridge Gold 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 Seabridge Gold will offset losses from the drop in Seabridge Gold'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 |
| Seabridge Gold vs. Franco Nevada | Seabridge Gold vs. Wheaton Precious Metals | Seabridge Gold vs. Osisko Gold Ro | Seabridge Gold vs. Sandstorm Gold Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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