Correlation Between Check Point and Harmony Gold

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

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

Diversification Opportunities for Check Point and Harmony Gold

0.08

Correlation Coefficient

Check Point  Harmony Gold

Significant diversification

The 3 months correlation between Check and Harmony is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Harmony Gold go up and down completely randomly.

Pair Corralation between Check Point and Harmony Gold

Assuming the 90 days trading horizon Check Point Software is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Check Point Software is 1.46 times less risky than Harmony Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,220  in Harmony Gold Mining on April 23, 2025 and sell it today you would earn a total of  5.00  from holding Harmony Gold Mining or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Check Point Software  vs.  Harmony Gold Mining

Check Point Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Check Point may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Harmony Gold Mining

Risk-Adjusted Performance

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Check Point and Harmony Gold

The main advantage of trading using opposite Check Point and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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 Check Point Software 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.