Correlation Between Harmony Gold and Intel

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

Diversification Opportunities for Harmony Gold and Intel

0.13

Correlation Coefficient

Harmony Gold  Intel

Average diversification

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

Pair Corralation between Harmony Gold and Intel

Assuming the 90 days horizon Harmony Gold Mining is expected to under-perform the Intel. In addition to that, Harmony Gold is 1.17 times more volatile than Intel. It trades about -0.12 of its total potential returns per unit of risk. Intel is currently generating about 0.04 per unit of volatility. If you would invest  1,975  in Intel on October 9, 2024 and sell it today you would earn a total of  24.00  from holding Intel or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Harmony Gold Mining  vs.  Intel

Harmony Gold Mining

Risk-Adjusted Performance

1 of 100

Very 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 nearly stable basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Intel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Harmony Gold and Intel

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

The idea behind Harmony Gold Mining and Intel 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.