Correlation Between Maple Gold and Harmony Gold

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Can any of the company-specific risk be diversified away by investing in both Maple Gold and Harmony 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 Maple Gold and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Gold Mines and Harmony Gold Mining, you can compare the effects of market volatilities on Maple Gold and Harmony 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 Maple Gold with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Gold and Harmony Gold.

Diversification Opportunities for Maple Gold and Harmony Gold

MapleHarmonyDiversified AwayMapleHarmonyDiversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Maple and Harmony is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Maple Gold Mines and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and Maple 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 Maple Gold Mines are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Maple Gold i.e., Maple Gold and Harmony Gold go up and down completely randomly.

Pair Corralation between Maple Gold and Harmony Gold

Assuming the 90 days horizon Maple Gold is expected to generate 21.77 times less return on investment than Harmony Gold. In addition to that, Maple Gold is 1.9 times more volatile than Harmony Gold Mining. It trades about 0.0 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.1 per unit of volatility. If you would invest  288.00  in Harmony Gold Mining on November 26, 2024 and sell it today you would earn a total of  825.00  from holding Harmony Gold Mining or generate 286.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Maple Gold Mines  vs.  Harmony Gold Mining

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-10010203040
JavaScript chart by amCharts 3.21.15MGMLF HMY
       Timeline  
Maple Gold Mines 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Maple Gold Mines are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Maple Gold reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0350.040.0450.050.055
Harmony Gold Mining 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Harmony Gold showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb88.599.51010.51111.51212.5

Maple Gold and Harmony Gold Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-21.58-16.16-10.74-5.330.09245.4511.016.5422.09 0.010.020.030.04
JavaScript chart by amCharts 3.21.15MGMLF HMY
       Returns  

Pair Trading with Maple Gold and Harmony Gold

The main advantage of trading using opposite Maple Gold and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Gold position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.
The idea behind Maple Gold Mines and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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