Correlation Between Harmony Gold and Hoist Finance

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

Diversification Opportunities for Harmony Gold and Hoist Finance

-0.4

Correlation Coefficient

Harmony Gold  Hoist Finance

Very good diversification

The 3 months correlation between Harmony and Hoist is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Harmony Gold i.e., Harmony Gold and Hoist Finance go up and down completely randomly.

Pair Corralation between Harmony Gold and Hoist Finance

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Hoist Finance. But the stock apears to be less risky and, when comparing its historical volatility, Harmony Gold Mining is 1.6 times less risky than Hoist Finance. The stock trades about -0.09 of its potential returns per unit of risk. The Hoist Finance AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  666.00  in Hoist Finance AB on April 20, 2025 and sell it today you would earn a total of  118.00  from holding Hoist Finance AB or generate 17.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Harmony Gold Mining  vs.  Hoist Finance AB

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hoist Finance AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hoist Finance AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Hoist Finance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and Hoist Finance

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

The idea behind Harmony Gold Mining and Hoist Finance AB 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.