Correlation Between Neogen and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Neogen 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 Neogen and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogen and Harmony Gold Mining, you can compare the effects of market volatilities on Neogen 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 Neogen with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogen and Harmony Gold.
Diversification Opportunities for Neogen and Harmony Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neogen and Harmony is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Neogen 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 Neogen 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 Neogen 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 Neogen i.e., Neogen and Harmony Gold go up and down completely randomly.
Pair Corralation between Neogen and Harmony Gold
Given the investment horizon of 90 days Neogen is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Neogen is 1.28 times less risky than Harmony Gold. The stock trades about -0.06 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,033 in Harmony Gold Mining on August 31, 2024 and sell it today you would lose (83.00) from holding Harmony Gold Mining or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Neogen vs. Harmony Gold Mining
Performance |
| Timeline |
| Neogen |
| Harmony Gold Mining |
Neogen and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogen and Harmony Gold
The main advantage of trading using opposite Neogen and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogen 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.| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. Gold Springs Resource |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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