Correlation Between Northstar Clean and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both Northstar Clean and Harmony Gold 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 Northstar Clean and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northstar Clean Technologies and Harmony Gold Mining, you can compare the effects of market volatilities on Northstar Clean and Harmony Gold 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 Northstar Clean with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Harmony Gold.

Diversification Opportunities for Northstar Clean and Harmony Gold

-0.71

Correlation Coefficient

Northstar Clean  Harmony Gold

Pay attention - limited upside

The 3 months correlation between Northstar and Harmony is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Northstar Clean i.e., Northstar Clean and Harmony Gold go up and down completely randomly.

Pair Corralation between Northstar Clean and Harmony Gold

Assuming the 90 days horizon Northstar Clean Technologies is expected to generate 1.65 times more return on investment than Harmony Gold. However, Northstar Clean is 1.65 times more volatile than Harmony Gold Mining. It trades about 0.06 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.07 per unit of risk. If you would invest  11.00  in Northstar Clean Technologies on October 11, 2024 and sell it today you would earn a total of  17.00  from holding Northstar Clean Technologies or generate 154.55% return on investment over 90 days.

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

Northstar Clean Technologies  vs.  Harmony Gold Mining

Northstar Clean Tech

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Northstar Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Northstar Clean and Harmony Gold

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

The idea behind Northstar Clean Technologies and Harmony Gold Mining 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.