Correlation Between CHESNARA PLC and SANLAM
Can any of the company-specific risk be diversified away by investing in both CHESNARA PLC and SANLAM 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 CHESNARA PLC and SANLAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHESNARA PLC LS 05 and SANLAM LTD RC 01, you can compare the effects of market volatilities on CHESNARA PLC and SANLAM 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 CHESNARA PLC with a short position of SANLAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHESNARA PLC and SANLAM.
Diversification Opportunities for CHESNARA PLC and SANLAM
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHESNARA and SANLAM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CHESNARA PLC LS 05 and SANLAM LTD RC 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANLAM LTD RC and CHESNARA PLC 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 CHESNARA PLC LS 05 are associated (or correlated) with SANLAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANLAM LTD RC has no effect on the direction of CHESNARA PLC i.e., CHESNARA PLC and SANLAM go up and down completely randomly.
Pair Corralation between CHESNARA PLC and SANLAM
Assuming the 90 days horizon CHESNARA PLC LS 05 is expected to generate 1.17 times more return on investment than SANLAM. However, CHESNARA PLC is 1.17 times more volatile than SANLAM LTD RC 01. It trades about 0.03 of its potential returns per unit of risk. SANLAM LTD RC 01 is currently generating about -0.08 per unit of risk. If you would invest 314.00 in CHESNARA PLC LS 05 on October 25, 2024 and sell it today you would earn a total of 2.00 from holding CHESNARA PLC LS 05 or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CHESNARA PLC LS 05 vs. SANLAM LTD RC 01
Performance |
| Timeline |
| CHESNARA PLC LS |
| SANLAM LTD RC |
CHESNARA PLC and SANLAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHESNARA PLC and SANLAM
The main advantage of trading using opposite CHESNARA PLC and SANLAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHESNARA PLC position performs unexpectedly, SANLAM 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 SANLAM will offset losses from the drop in SANLAM's long position.| CHESNARA PLC vs. Aluminum of | CHESNARA PLC vs. Wizz Air Holdings | CHESNARA PLC vs. Yuexiu Transport Infrastructure | CHESNARA PLC vs. ADRIATIC METALS LS 013355 |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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