Correlation Between Harmony Gold and Alibaba Group

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

Diversification Opportunities for Harmony Gold and Alibaba Group

-0.05

Correlation Coefficient

Harmony Gold  Alibaba Group

Good diversification

The 3 months correlation between Harmony and Alibaba is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Harmony Gold i.e., Harmony Gold and Alibaba Group go up and down completely randomly.

Pair Corralation between Harmony Gold and Alibaba Group

Assuming the 90 days trading horizon Harmony Gold Mining is expected to under-perform the Alibaba Group. In addition to that, Harmony Gold is 1.2 times more volatile than Alibaba Group Holding. It trades about -0.03 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.11 per unit of volatility. If you would invest  1,481,024  in Alibaba Group Holding on April 22, 2025 and sell it today you would earn a total of  251,476  from holding Alibaba Group Holding or generate 16.98% 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.  Alibaba Group Holding

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 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.

Alibaba Group Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Alibaba Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and Alibaba Group

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

The idea behind Harmony Gold Mining and Alibaba Group Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.