Correlation Between Vindicator Silver and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both Vindicator Silver 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 Vindicator Silver and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vindicator Silver Lead Mining and Harmony Gold Mining, you can compare the effects of market volatilities on Vindicator Silver 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 Vindicator Silver with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vindicator Silver and Harmony Gold.

Diversification Opportunities for Vindicator Silver and Harmony Gold

-0.39

Correlation Coefficient

Vindicator Silver  Harmony Gold

Very good diversification

The 3 months correlation between Vindicator and Harmony is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vindicator Silver Lead 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 Vindicator Silver 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 Vindicator Silver Lead 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 Vindicator Silver i.e., Vindicator Silver and Harmony Gold go up and down completely randomly.

Pair Corralation between Vindicator Silver and Harmony Gold

Given the investment horizon of 90 days Vindicator Silver is expected to generate 2.27 times less return on investment than Harmony Gold. In addition to that, Vindicator Silver is 1.71 times more volatile than Harmony Gold Mining. It trades about 0.03 of its total potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.1 per unit of volatility. If you would invest  202.00  in Harmony Gold Mining on September 4, 2024 and sell it today you would earn a total of  748.00  from holding Harmony Gold Mining or generate 370.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.45%
Values	Daily Returns

Vindicator Silver Lead Mining  vs.  Harmony Gold Mining

Vindicator Silver Lead

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vindicator Silver Lead Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vindicator Silver is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 nearly stable fundamental indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vindicator Silver and Harmony Gold

The main advantage of trading using opposite Vindicator Silver and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vindicator Silver 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.

The idea behind Vindicator Silver Lead Mining and Harmony Gold Mining 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.