Correlation Between SSR Mining and Harmony Gold

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

Diversification Opportunities for SSR Mining and Harmony Gold

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between SSR and Harmony is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining 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 SSR Mining 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 SSR Mining 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 SSR Mining i.e., SSR Mining and Harmony Gold go up and down completely randomly.

Pair Corralation between SSR Mining and Harmony Gold

Given the investment horizon of 90 days SSR Mining is expected to generate 1.63 times more return on investment than Harmony Gold. However, SSR Mining is 1.63 times more volatile than Harmony Gold Mining. It trades about 0.26 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.16 per unit of risk. If you would invest  576.00  in SSR Mining on September 24, 2024 and sell it today you would earn a total of  136.00  from holding SSR Mining or generate 23.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SSR Mining  vs.  Harmony Gold Mining

 Performance 
       Timeline  
SSR Mining 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, SSR Mining displayed solid returns over the last few months and may actually be approaching a breakup point.
Harmony Gold Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SSR Mining and Harmony Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SSR Mining and Harmony Gold

The main advantage of trading using opposite SSR Mining and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR Mining 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 SSR Mining 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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