Correlation Between Evolution Mining and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Evolution 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 Evolution 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 Evolution Mining Limited and Harmony Gold Mining, you can compare the effects of market volatilities on Evolution 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 Evolution Mining with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and Harmony Gold.
Diversification Opportunities for Evolution Mining and Harmony Gold
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evolution and Harmony is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited 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 Evolution 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 Evolution Mining Limited 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 Evolution Mining i.e., Evolution Mining and Harmony Gold go up and down completely randomly.
Pair Corralation between Evolution Mining and Harmony Gold
Assuming the 90 days horizon Evolution Mining Limited is expected to generate 0.62 times more return on investment than Harmony Gold. However, Evolution Mining Limited is 1.61 times less risky than Harmony Gold. It trades about -0.2 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.23 per unit of risk. If you would invest 324.00 in Evolution Mining Limited on August 24, 2024 and sell it today you would lose (27.00) from holding Evolution Mining Limited or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Mining Limited vs. Harmony Gold Mining
Performance |
| Timeline |
| Evolution Mining |
| Harmony Gold Mining |
Evolution Mining and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Mining and Harmony Gold
The main advantage of trading using opposite Evolution Mining and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution 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.| Evolution Mining vs. Gladstone Investment | Evolution Mining vs. Compagnie Plastic Omnium | Evolution Mining vs. Materialise NV | Evolution Mining vs. Martin Marietta Materials |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Agnico Eagle Mines | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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