Correlation Between Harmony Gold and Agrometal SAI

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

Diversification Opportunities for Harmony Gold and Agrometal SAI

-0.13

Correlation Coefficient

Harmony Gold  Agrometal SAI

Good diversification

The 3 months correlation between Harmony and Agrometal is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI 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 Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Harmony Gold i.e., Harmony Gold and Agrometal SAI go up and down completely randomly.

Pair Corralation between Harmony Gold and Agrometal SAI

Assuming the 90 days trading horizon Harmony Gold Mining is expected to generate 0.85 times more return on investment than Agrometal SAI. However, Harmony Gold Mining is 1.18 times less risky than Agrometal SAI. It trades about 0.02 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.0 per unit of risk. If you would invest  1,887,500  in Harmony Gold Mining on April 23, 2025 and sell it today you would earn a total of  12,500  from holding Harmony Gold Mining or generate 0.66% 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.  Agrometal SAI

Harmony Gold Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Agrometal SAI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrometal SAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Agrometal SAI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harmony Gold and Agrometal SAI

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

The idea behind Harmony Gold Mining and Agrometal SAI 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.