Correlation Between Pan African and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Pan African 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 Pan African and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan African Resources and Harmony Gold Mining, you can compare the effects of market volatilities on Pan African 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 Pan African with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan African and Harmony Gold.
Diversification Opportunities for Pan African and Harmony Gold
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Harmony is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pan African Resources 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 Pan African 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 Pan African Resources 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 Pan African i.e., Pan African and Harmony Gold go up and down completely randomly.
Pair Corralation between Pan African and Harmony Gold
Assuming the 90 days horizon Pan African Resources is expected to generate 0.34 times more return on investment than Harmony Gold. However, Pan African Resources is 2.94 times less risky than Harmony Gold. It trades about 0.21 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.17 per unit of risk. If you would invest 35.00 in Pan African Resources on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Pan African Resources or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pan African Resources vs. Harmony Gold Mining
Performance |
| Timeline |
| Pan African Resources |
| Harmony Gold Mining |
Pan African and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan African and Harmony Gold
The main advantage of trading using opposite Pan African and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan African 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.| Pan African vs. Harmony Gold Mining | Pan African vs. SPACE | Pan African vs. T Rowe Price | Pan African vs. Ampleforth |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |