Correlation Between Harmony Gold and Ringmetall

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

Diversification Opportunities for Harmony Gold and Ringmetall

-0.2

Correlation Coefficient

Harmony Gold  Ringmetall

Good diversification

The 3 months correlation between Harmony and Ringmetall is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Ringmetall SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ringmetall SE 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 Ringmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ringmetall SE has no effect on the direction of Harmony Gold i.e., Harmony Gold and Ringmetall go up and down completely randomly.

Pair Corralation between Harmony Gold and Ringmetall

Assuming the 90 days horizon Harmony Gold Mining is expected to generate 0.97 times more return on investment than Ringmetall. However, Harmony Gold Mining is 1.04 times less risky than Ringmetall. It trades about 0.09 of its potential returns per unit of risk. Ringmetall SE is currently generating about 0.02 per unit of risk. If you would invest  357.00  in Harmony Gold Mining on April 23, 2025 and sell it today you would earn a total of  868.00  from holding Harmony Gold Mining or generate 243.14% 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.  Ringmetall SE

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.

Ringmetall SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ringmetall SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ringmetall is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Harmony Gold and Ringmetall

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

The idea behind Harmony Gold Mining and Ringmetall SE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.