Correlation Between INTNED and Harmony Gold

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

By analyzing existing cross correlation between INTNED 3875 and Harmony Gold Mining, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Harmony Gold.

Diversification Opportunities for INTNED and Harmony Gold

0.11

Correlation Coefficient

INTNED  Harmony Gold

Average diversification

The 3 months correlation between INTNED and Harmony is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 3875 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 INTNED 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 INTNED 3875 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 INTNED i.e., INTNED and Harmony Gold go up and down completely randomly.

Pair Corralation between INTNED and Harmony Gold

Assuming the 90 days trading horizon INTNED 3875 is expected to generate 2.99 times more return on investment than Harmony Gold. However, INTNED is 2.99 times more volatile than Harmony Gold Mining. It trades about -0.02 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.11 per unit of risk. If you would invest  9,012  in INTNED 3875 on September 19, 2024 and sell it today you would lose (579.00) from holding INTNED 3875 or give up 6.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	68.18%
Values	Daily Returns

INTNED 3875  vs.  Harmony Gold Mining

INTNED 3875

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days INTNED 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 unfluctuating 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 INTNED and Harmony Gold

The main advantage of trading using opposite INTNED and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 3875 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.