Correlation Between AfroCentric Investment and Rex Trueform
Can any of the company-specific risk be diversified away by investing in both AfroCentric Investment and Rex Trueform 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 AfroCentric Investment and Rex Trueform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfroCentric Investment Corp and Rex Trueform Group, you can compare the effects of market volatilities on AfroCentric Investment and Rex Trueform 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 AfroCentric Investment with a short position of Rex Trueform. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfroCentric Investment and Rex Trueform.
Diversification Opportunities for AfroCentric Investment and Rex Trueform
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AfroCentric and Rex is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AfroCentric Investment Corp and Rex Trueform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rex Trueform Group and AfroCentric Investment 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 AfroCentric Investment Corp are associated (or correlated) with Rex Trueform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rex Trueform Group has no effect on the direction of AfroCentric Investment i.e., AfroCentric Investment and Rex Trueform go up and down completely randomly.
Pair Corralation between AfroCentric Investment and Rex Trueform
Assuming the 90 days trading horizon AfroCentric Investment Corp is expected to under-perform the Rex Trueform. In addition to that, AfroCentric Investment is 85.22 times more volatile than Rex Trueform Group. It trades about -0.12 of its total potential returns per unit of risk. Rex Trueform Group is currently generating about 0.21 per unit of volatility. If you would invest 116,800 in Rex Trueform Group on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Rex Trueform Group or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AfroCentric Investment Corp vs. Rex Trueform Group
Performance |
| Timeline |
| AfroCentric Investment |
| Rex Trueform Group |
AfroCentric Investment and Rex Trueform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfroCentric Investment and Rex Trueform
The main advantage of trading using opposite AfroCentric Investment and Rex Trueform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfroCentric Investment position performs unexpectedly, Rex Trueform 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 Rex Trueform will offset losses from the drop in Rex Trueform's long position.| AfroCentric Investment vs. Life Healthcare | AfroCentric Investment vs. Sasol Ltd Bee | AfroCentric Investment vs. Centaur Bci Balanced | AfroCentric Investment vs. Growthpoint Properties |
| Rex Trueform vs. E Media Holdings | Rex Trueform vs. AfroCentric Investment Corp | Rex Trueform vs. Hosken Consolidated Investments | Rex Trueform vs. Blue Label Telecoms |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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