Correlation Between Transportadora and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Harmony Gold Mining, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Harmony Gold.
Diversification Opportunities for Transportadora and Harmony Gold
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transportadora and Harmony is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Harmony Gold go up and down completely randomly.
Pair Corralation between Transportadora and Harmony Gold
Assuming the 90 days trading horizon Transportadora is expected to generate 2.82 times less return on investment than Harmony Gold. In addition to that, Transportadora is 1.97 times more volatile than Harmony Gold Mining. It trades about 0.09 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.51 per unit of volatility. If you would invest 961,000 in Harmony Gold Mining on October 20, 2024 and sell it today you would earn a total of 191,500 from holding Harmony Gold Mining or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Harmony Gold Mining
Performance |
| Timeline |
| Transportadora de Gas |
| Harmony Gold Mining |
Transportadora and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Harmony Gold
The main advantage of trading using opposite Transportadora and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. Agrometal SAI | Transportadora vs. Harmony Gold Mining | Transportadora vs. Compania de Transporte | Transportadora vs. United States Steel |
| Harmony Gold vs. United States Steel | Harmony Gold vs. Compania de Transporte | Harmony Gold vs. Agrometal SAI |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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