Correlation Between Phenom Resources and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Phenom Resources 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 Phenom Resources and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phenom Resources Corp and Harmony Gold Mining, you can compare the effects of market volatilities on Phenom Resources 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 Phenom Resources with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phenom Resources and Harmony Gold.
Diversification Opportunities for Phenom Resources and Harmony Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phenom and Harmony is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Phenom Resources Corp 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 Phenom Resources 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 Phenom Resources Corp 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 Phenom Resources i.e., Phenom Resources and Harmony Gold go up and down completely randomly.
Pair Corralation between Phenom Resources and Harmony Gold
Assuming the 90 days horizon Phenom Resources is expected to generate 2.43 times less return on investment than Harmony Gold. In addition to that, Phenom Resources is 1.53 times more volatile than Harmony Gold Mining. It trades about 0.02 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 per unit of volatility. If you would invest 338.00 in Harmony Gold Mining on September 12, 2024 and sell it today you would earn a total of 591.00 from holding Harmony Gold Mining or generate 174.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Phenom Resources Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Phenom Resources Corp |
| Harmony Gold Mining |
Phenom Resources and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phenom Resources and Harmony Gold
The main advantage of trading using opposite Phenom Resources and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phenom Resources 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.| Phenom Resources vs. Nulegacy Gold | Phenom Resources vs. Labrador Gold Corp | Phenom Resources vs. White Gold Corp | Phenom Resources vs. Getchell Gold Corp |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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