Correlation Between Grupo Televisa and Harmony Gold

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

Diversification Opportunities for Grupo Televisa and Harmony Gold

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Grupo and Harmony is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB 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 Grupo Televisa 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 Grupo Televisa SAB 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 Grupo Televisa i.e., Grupo Televisa and Harmony Gold go up and down completely randomly.

Pair Corralation between Grupo Televisa and Harmony Gold

Assuming the 90 days horizon Grupo Televisa SAB is expected to generate 11.68 times more return on investment than Harmony Gold. However, Grupo Televisa is 11.68 times more volatile than Harmony Gold Mining. It trades about 0.04 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.13 per unit of risk. If you would invest  11,523  in Grupo Televisa SAB on August 31, 2024 and sell it today you would earn a total of  58,477  from holding Grupo Televisa SAB or generate 507.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Grupo Televisa SAB  vs.  Harmony Gold Mining

 Performance 
       Timeline  
Grupo Televisa SAB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Televisa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
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. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Grupo Televisa and Harmony Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Televisa and Harmony Gold

The main advantage of trading using opposite Grupo Televisa and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Televisa 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 Grupo Televisa SAB 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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