Correlation Between African Media and Ninety One
Can any of the company-specific risk be diversified away by investing in both African Media and Ninety One 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 Ninety One 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 Ninety One, you can compare the effects of market volatilities on African Media and Ninety One 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 Ninety One. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Media and Ninety One.
Diversification Opportunities for African Media and Ninety One
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between African and Ninety is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding African Media Entertainment and Ninety One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninety One 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 Ninety One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninety One has no effect on the direction of African Media i.e., African Media and Ninety One go up and down completely randomly.
Pair Corralation between African Media and Ninety One
Assuming the 90 days trading horizon African Media Entertainment is expected to under-perform the Ninety One. In addition to that, African Media is 3.12 times more volatile than Ninety One. It trades about -0.07 of its total potential returns per unit of risk. Ninety One is currently generating about -0.16 per unit of volatility. If you would invest 389,700 in Ninety One on August 27, 2024 and sell it today you would lose (14,300) from holding Ninety One or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
African Media Entertainment vs. Ninety One
Performance |
| Timeline |
| African Media Entert |
| Ninety One |
African Media and Ninety One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Media and Ninety One
The main advantage of trading using opposite African Media and Ninety One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Media position performs unexpectedly, Ninety One 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 Ninety One will offset losses from the drop in Ninety One's long position.| African Media vs. Sasol Ltd Bee | African Media vs. Growthpoint Properties | African Media vs. AfricaRhodium ETF | African Media vs. CoreShares Preference Share |
| Ninety One vs. Frontier Transport Holdings | Ninety One vs. Blue Label Telecoms | Ninety One vs. Reinet Investments SCA | Ninety One vs. Astoria 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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