Correlation Between Harmony Gold and Tarachi Gold
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Tarachi 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 Tarachi 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 Tarachi Gold Corp, you can compare the effects of market volatilities on Harmony Gold and Tarachi 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 Tarachi Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Tarachi Gold.
Diversification Opportunities for Harmony Gold and Tarachi Gold
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harmony and Tarachi is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Tarachi Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarachi Gold Corp 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 Tarachi Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarachi Gold Corp has no effect on the direction of Harmony Gold i.e., Harmony Gold and Tarachi Gold go up and down completely randomly.
Pair Corralation between Harmony Gold and Tarachi Gold
Considering the 90-day investment horizon Harmony Gold is expected to generate 1.82 times less return on investment than Tarachi Gold. But when comparing it to its historical volatility, Harmony Gold Mining is 3.46 times less risky than Tarachi Gold. It trades about 0.08 of its potential returns per unit of risk. Tarachi Gold Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.70 in Tarachi Gold Corp on September 12, 2024 and sell it today you would lose (2.10) from holding Tarachi Gold Corp or give up 56.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Harmony Gold Mining vs. Tarachi Gold Corp
Performance |
| Timeline |
| Harmony Gold Mining |
| Tarachi Gold Corp |
Harmony Gold and Tarachi Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and Tarachi Gold
The main advantage of trading using opposite Harmony Gold and Tarachi Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Tarachi 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 Tarachi Gold will offset losses from the drop in Tarachi 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 |
| Tarachi Gold vs. Avidian Gold Corp | Tarachi Gold vs. FireFox Gold Corp | Tarachi Gold vs. Getchell Gold Corp | Tarachi Gold vs. Viva Gold 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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