Correlation Between Harmony Gold and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Evolution Mining 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 Harmony Gold and Evolution Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Gold Mining and Evolution Mining, you can compare the effects of market volatilities on Harmony Gold and Evolution Mining 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 Harmony Gold with a short position of Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Evolution Mining.
Diversification Opportunities for Harmony Gold and Evolution Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Harmony and Evolution is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining and Harmony Gold 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 Harmony Gold Mining are associated (or correlated) with Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Harmony Gold i.e., Harmony Gold and Evolution Mining go up and down completely randomly.
Pair Corralation between Harmony Gold and Evolution Mining
Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.96 times more return on investment than Evolution Mining. However, Harmony Gold Mining is 1.04 times less risky than Evolution Mining. It trades about 0.09 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.04 per unit of risk. If you would invest 375.00 in Harmony Gold Mining on September 25, 2024 and sell it today you would earn a total of 575.00 from holding Harmony Gold Mining or generate 153.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 67.43% |
Values | Daily Returns |
Harmony Gold Mining vs. Evolution Mining
Performance |
Timeline |
Harmony Gold Mining |
Evolution Mining |
Harmony Gold and Evolution Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harmony Gold and Evolution Mining
The main advantage of trading using opposite Harmony Gold and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.Harmony Gold vs. Lion One Metals | Harmony Gold vs. Westhaven Gold Corp | Harmony Gold vs. Satori Resources | Harmony Gold vs. Wesdome Gold Mines |
Evolution Mining vs. Regis Resources | Evolution Mining vs. West African Resources | Evolution Mining vs. Allegiant Gold | Evolution Mining vs. Minaurum Gold |
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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