Correlation Between Allied Electronics and Nampak
Can any of the company-specific risk be diversified away by investing in both Allied Electronics and Nampak 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 Allied Electronics and Nampak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Electronics and Nampak, you can compare the effects of market volatilities on Allied Electronics and Nampak 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 Allied Electronics with a short position of Nampak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Electronics and Nampak.
Diversification Opportunities for Allied Electronics and Nampak
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allied and Nampak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allied Electronics and Nampak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nampak and Allied Electronics 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 Allied Electronics are associated (or correlated) with Nampak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nampak has no effect on the direction of Allied Electronics i.e., Allied Electronics and Nampak go up and down completely randomly.
Pair Corralation between Allied Electronics and Nampak
If you would invest 187,000 in Allied Electronics on September 4, 2024 and sell it today you would earn a total of 14,500 from holding Allied Electronics or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Allied Electronics vs. Nampak
Performance |
| Timeline |
| Allied Electronics |
| Nampak |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Allied Electronics and Nampak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Electronics and Nampak
The main advantage of trading using opposite Allied Electronics and Nampak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Electronics position performs unexpectedly, Nampak 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 Nampak will offset losses from the drop in Nampak's long position.| Allied Electronics vs. Ayo Technology Solutions | Allied Electronics vs. Sasol Ltd Bee | Allied Electronics vs. Centaur Bci Balanced | Allied Electronics vs. Growthpoint Properties |
| Nampak vs. Life Healthcare | Nampak vs. Frontier Transport Holdings | Nampak vs. RCL Foods | Nampak vs. Deneb Investments |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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