Correlation Between Aveng and Deneb Investments
Can any of the company-specific risk be diversified away by investing in both Aveng and Deneb Investments 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 Aveng and Deneb Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aveng and Deneb Investments, you can compare the effects of market volatilities on Aveng and Deneb Investments 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 Aveng with a short position of Deneb Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aveng and Deneb Investments.
Diversification Opportunities for Aveng and Deneb Investments
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aveng and Deneb is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aveng and Deneb Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deneb Investments and Aveng 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 Aveng are associated (or correlated) with Deneb Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deneb Investments has no effect on the direction of Aveng i.e., Aveng and Deneb Investments go up and down completely randomly.
Pair Corralation between Aveng and Deneb Investments
Assuming the 90 days trading horizon Aveng is expected to generate 0.61 times more return on investment than Deneb Investments. However, Aveng is 1.63 times less risky than Deneb Investments. It trades about 0.11 of its potential returns per unit of risk. Deneb Investments is currently generating about -0.07 per unit of risk. If you would invest 115,400 in Aveng on November 2, 2024 and sell it today you would earn a total of 7,900 from holding Aveng or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aveng vs. Deneb Investments
Performance |
| Timeline |
| Aveng |
| Deneb Investments |
Aveng and Deneb Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aveng and Deneb Investments
The main advantage of trading using opposite Aveng and Deneb Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aveng position performs unexpectedly, Deneb Investments 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 Deneb Investments will offset losses from the drop in Deneb Investments' long position.| Aveng vs. MC Mining | Aveng vs. Safari Investments RSA | Aveng vs. Mantengu Mining | Aveng vs. African Media Entertainment |
| Deneb Investments vs. Bidvest Group | Deneb Investments vs. Kap Industrial Holdings | Deneb Investments vs. Hosken Consolidated Investments | Deneb Investments vs. Brikor |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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