Correlation Between Harmony Gold and InterContinental
Can any of the company-specific risk be diversified away by investing in both Harmony Gold and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on Harmony Gold and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and InterContinental.
Diversification Opportunities for Harmony Gold and InterContinental
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harmony and InterContinental is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Harmony Gold i.e., Harmony Gold and InterContinental go up and down completely randomly.
Pair Corralation between Harmony Gold and InterContinental
Assuming the 90 days horizon Harmony Gold is expected to generate 1.38 times less return on investment than InterContinental. In addition to that, Harmony Gold is 2.46 times more volatile than InterContinental Hotels Group. It trades about 0.04 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.13 per unit of volatility. If you would invest 9,643 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 2,557 from holding InterContinental Hotels Group or generate 26.52% 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. InterContinental Hotels Group
Performance |
| Timeline |
| Harmony Gold Mining |
| InterContinental Hotels |
Harmony Gold and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Gold and InterContinental
The main advantage of trading using opposite Harmony Gold and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. SIVERS SEMICONDUCTORS AB | Harmony Gold vs. Norsk Hydro ASA |
| InterContinental vs. Neinor Homes SA | InterContinental vs. HomeToGo SE | InterContinental vs. DEVRY EDUCATION GRP | InterContinental vs. Adtalem Global Education |
Check out your portfolio center.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.
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