Correlation Between Summa Silver and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Harmony Gold Mining, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Harmony Gold.
Diversification Opportunities for Summa Silver and Harmony Gold
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summa and Harmony is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver 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 Summa Silver 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 Summa Silver 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 Summa Silver i.e., Summa Silver and Harmony Gold go up and down completely randomly.
Pair Corralation between Summa Silver and Harmony Gold
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Harmony Gold. In addition to that, Summa Silver is 1.46 times more volatile than Harmony Gold Mining. It trades about -0.11 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.04 per unit of volatility. If you would invest 880.00 in Harmony Gold Mining on September 1, 2024 and sell it today you would earn a total of 70.00 from holding Harmony Gold Mining or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Summa Silver Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Summa Silver Corp |
| Harmony Gold Mining |
Summa Silver and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Harmony Gold
The main advantage of trading using opposite Summa Silver and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. BTU Metals Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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