Correlation Between Harmony Gold and Matba Rofex

Can any of the company-specific risk be diversified away by investing in both Harmony Gold and Matba Rofex 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 Matba Rofex 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 Matba Rofex SA, you can compare the effects of market volatilities on Harmony Gold and Matba Rofex 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 Matba Rofex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Matba Rofex.

Diversification Opportunities for Harmony Gold and Matba Rofex

-0.37

Correlation Coefficient

Harmony Gold  Matba Rofex

Very good diversification

The 3 months correlation between Harmony and Matba is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Matba Rofex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matba Rofex SA 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 Matba Rofex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matba Rofex SA has no effect on the direction of Harmony Gold i.e., Harmony Gold and Matba Rofex go up and down completely randomly.

Pair Corralation between Harmony Gold and Matba Rofex

Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Matba Rofex. In addition to that, Harmony Gold is 1.42 times more volatile than Matba Rofex SA. It trades about -0.07 of its total potential returns per unit of risk. Matba Rofex SA is currently generating about 0.26 per unit of volatility. If you would invest  181,500  in Matba Rofex SA on September 3, 2024 and sell it today you would earn a total of  91,500  from holding Matba Rofex SA or generate 50.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Harmony Gold Mining  vs.  Matba Rofex SA

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Matba Rofex SA

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Matba Rofex SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Matba Rofex sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and Matba Rofex

The main advantage of trading using opposite Harmony Gold and Matba Rofex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, Matba Rofex 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 Matba Rofex will offset losses from the drop in Matba Rofex's long position.

The idea behind Harmony Gold Mining and Matba Rofex SA 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.

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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.