Correlation Between SHIP HEALTHCARE and Harmony Gold

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Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Harmony Gold Mining, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Harmony Gold.

Diversification Opportunities for SHIP HEALTHCARE and Harmony Gold

SHIPHarmonyDiversified AwaySHIPHarmonyDiversified Away100%
0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between SHIP and Harmony is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Harmony Gold go up and down completely randomly.

Pair Corralation between SHIP HEALTHCARE and Harmony Gold

Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.44 times more return on investment than Harmony Gold. However, SHIP HEALTHCARE HLDGINC is 2.27 times less risky than Harmony Gold. It trades about 0.05 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.03 per unit of risk. If you would invest  1,330  in SHIP HEALTHCARE HLDGINC on September 20, 2024 and sell it today you would earn a total of  50.00  from holding SHIP HEALTHCARE HLDGINC or generate 3.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SHIP HEALTHCARE HLDGINC  vs.  Harmony Gold Mining

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510152025
JavaScript chart by amCharts 3.21.155EZ HAM
       Timeline  
SHIP HEALTHCARE HLDGINC 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SHIP HEALTHCARE HLDGINC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SHIP HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec12.51313.51414.5
Harmony Gold Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec88.599.51010.511

SHIP HEALTHCARE and Harmony Gold Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.78-3.58-2.38-1.180.01.172.383.594.816.02 0.050.100.15
JavaScript chart by amCharts 3.21.155EZ HAM
       Returns  

Pair Trading with SHIP HEALTHCARE and Harmony Gold

The main advantage of trading using opposite SHIP HEALTHCARE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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