Correlation Between Harmony Gold and Chemours

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

Diversification Opportunities for Harmony Gold and Chemours

-0.29

Correlation Coefficient

Harmony Gold  Chemours

Very good diversification

The 3 months correlation between Harmony and Chemours is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Harmony Gold i.e., Harmony Gold and Chemours go up and down completely randomly.

Pair Corralation between Harmony Gold and Chemours

Considering the 90-day investment horizon Harmony Gold Mining is expected to under-perform the Chemours. In addition to that, Harmony Gold is 1.01 times more volatile than Chemours Co. It trades about -0.08 of its total potential returns per unit of risk. Chemours Co is currently generating about 0.0 per unit of volatility. If you would invest  1,853  in Chemours Co on September 23, 2024 and sell it today you would lose (81.00) from holding Chemours Co or give up 4.37% of portfolio value over 90 days.

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

Harmony Gold Mining  vs.  Chemours Co

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. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly 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.

Chemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Harmony Gold and Chemours

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

The idea behind Harmony Gold Mining and Chemours Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.