Correlation Between Harmony Gold and S A P

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

Diversification Opportunities for Harmony Gold and S A P

-0.48

Correlation Coefficient

Harmony Gold  S A P

Very good diversification

The 3 months correlation between Harmony and SAP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of Harmony Gold i.e., Harmony Gold and S A P go up and down completely randomly.

Pair Corralation between Harmony Gold and S A P

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the S A P. In addition to that, Harmony Gold is 1.96 times more volatile than SAP SE. It trades about -0.08 of its total potential returns per unit of risk. SAP SE is currently generating about 0.18 per unit of volatility. If you would invest  21,654  in SAP SE on April 21, 2025 and sell it today you would earn a total of  4,751  from holding SAP SE or generate 21.94% return on investment over 90 days.

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

Harmony Gold Mining  vs.  SAP 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 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.

SAP SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, S A P unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and S A P

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

The idea behind Harmony Gold Mining and SAP 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.