Correlation Between African Media and Copper 360
Can any of the company-specific risk be diversified away by investing in both African Media and Copper 360 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 African Media and Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between African Media Entertainment and Copper 360, you can compare the effects of market volatilities on African Media and Copper 360 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 African Media with a short position of Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Media and Copper 360.
Diversification Opportunities for African Media and Copper 360
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between African and Copper is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding African Media Entertainment and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 and African Media 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 African Media Entertainment are associated (or correlated) with Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of African Media i.e., African Media and Copper 360 go up and down completely randomly.
Pair Corralation between African Media and Copper 360
Assuming the 90 days trading horizon African Media Entertainment is expected to under-perform the Copper 360. In addition to that, African Media is 1.15 times more volatile than Copper 360. It trades about -0.07 of its total potential returns per unit of risk. Copper 360 is currently generating about -0.06 per unit of volatility. If you would invest 31,500 in Copper 360 on August 24, 2024 and sell it today you would lose (1,400) from holding Copper 360 or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
African Media Entertainment vs. Copper 360
Performance |
| Timeline |
| African Media Entert |
| Copper 360 |
African Media and Copper 360 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Media and Copper 360
The main advantage of trading using opposite African Media and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Media position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.| African Media vs. Sasol Ltd Bee | African Media vs. Centaur Bci Balanced | African Media vs. Sabvest Capital | African Media vs. Growthpoint Properties |
| Copper 360 vs. British American Tobacco | Copper 360 vs. Anglo American PLC | Copper 360 vs. ABSA Bank Limited | Copper 360 vs. Firstrand |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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