Correlation Between Molinos Agro and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Molinos Agro 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 Molinos Agro and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molinos Agro SA and Harmony Gold Mining, you can compare the effects of market volatilities on Molinos Agro 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 Molinos Agro with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molinos Agro and Harmony Gold.
Diversification Opportunities for Molinos Agro and Harmony Gold
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Molinos and Harmony is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Molinos Agro SA 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 Molinos Agro 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 Molinos Agro SA 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 Molinos Agro i.e., Molinos Agro and Harmony Gold go up and down completely randomly.
Pair Corralation between Molinos Agro and Harmony Gold
Assuming the 90 days trading horizon Molinos Agro SA is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Molinos Agro SA is 1.35 times less risky than Harmony Gold. The stock trades about -0.59 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,240,000 in Harmony Gold Mining on November 29, 2024 and sell it today you would earn a total of 80,000 from holding Harmony Gold Mining or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molinos Agro SA vs. Harmony Gold Mining
Performance |
| Timeline |
| Molinos Agro SA |
| Harmony Gold Mining |
Molinos Agro and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molinos Agro and Harmony Gold
The main advantage of trading using opposite Molinos Agro and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molinos Agro 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.| Molinos Agro vs. Transportadora de Gas | Molinos Agro vs. Harmony Gold Mining | Molinos Agro vs. Verizon Communications | Molinos Agro vs. Agrometal SAI |
| Harmony Gold vs. Verizon Communications | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. United States Steel |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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