Correlation Between Hycroft Mining and DRDGOLD Limited

Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and DRDGOLD Limited 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 Hycroft Mining and DRDGOLD Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hycroft Mining Holding and DRDGOLD Limited ADR, you can compare the effects of market volatilities on Hycroft Mining and DRDGOLD Limited 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 Hycroft Mining with a short position of DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and DRDGOLD Limited.

Diversification Opportunities for Hycroft Mining and DRDGOLD Limited

0.39

Correlation Coefficient

Hycroft Mining  DRDGOLD Limited

Weak diversification

The 3 months correlation between Hycroft and DRDGOLD is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR and Hycroft Mining 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 Hycroft Mining Holding are associated (or correlated) with DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and DRDGOLD Limited go up and down completely randomly.

Pair Corralation between Hycroft Mining and DRDGOLD Limited

Assuming the 90 days horizon Hycroft Mining Holding is expected to under-perform the DRDGOLD Limited. In addition to that, Hycroft Mining is 6.53 times more volatile than DRDGOLD Limited ADR. It trades about -0.36 of its total potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.0 per unit of volatility. If you would invest  1,450  in DRDGOLD Limited ADR on May 5, 2025 and sell it today you would lose (63.00) from holding DRDGOLD Limited ADR or give up 4.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	28.57%
Values	Daily Returns

Hycroft Mining Holding  vs.  DRDGOLD Limited ADR

Hycroft Mining Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hycroft Mining Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

DRDGOLD Limited ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days DRDGOLD Limited ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DRDGOLD Limited is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hycroft Mining and DRDGOLD Limited

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

The idea behind Hycroft Mining Holding and DRDGOLD Limited ADR 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.