Correlation Between American Pacific and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both American Pacific 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 American Pacific and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Pacific Mining and Harmony Gold Mining, you can compare the effects of market volatilities on American Pacific 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 American Pacific with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and Harmony Gold.
Diversification Opportunities for American Pacific and Harmony Gold
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Harmony is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific 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 American Pacific 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 American Pacific 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 American Pacific i.e., American Pacific and Harmony Gold go up and down completely randomly.
Pair Corralation between American Pacific and Harmony Gold
Assuming the 90 days horizon American Pacific Mining is expected to generate 2.38 times more return on investment than Harmony Gold. However, American Pacific is 2.38 times more volatile than Harmony Gold Mining. It trades about 0.1 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.0 per unit of risk. If you would invest 11.00 in American Pacific Mining on September 12, 2024 and sell it today you would earn a total of 4.00 from holding American Pacific Mining or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Pacific Mining vs. Harmony Gold Mining
Performance |
| Timeline |
| American Pacific Mining |
| Harmony Gold Mining |
American Pacific and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and Harmony Gold
The main advantage of trading using opposite American Pacific and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific 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.| American Pacific vs. Westward Gold | American Pacific vs. Heliostar Metals | American Pacific vs. Revival Gold | American Pacific vs. Cabral Gold |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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