Correlation Between Afine Investments and RMB Holdings
Can any of the company-specific risk be diversified away by investing in both Afine Investments and RMB Holdings 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 Afine Investments and RMB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and RMB Holdings, you can compare the effects of market volatilities on Afine Investments and RMB Holdings 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 Afine Investments with a short position of RMB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and RMB Holdings.
Diversification Opportunities for Afine Investments and RMB Holdings
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Afine and RMB is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and RMB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMB Holdings and Afine Investments 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 Afine Investments are associated (or correlated) with RMB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMB Holdings has no effect on the direction of Afine Investments i.e., Afine Investments and RMB Holdings go up and down completely randomly.
Pair Corralation between Afine Investments and RMB Holdings
Assuming the 90 days trading horizon Afine Investments is expected to generate 31.14 times more return on investment than RMB Holdings. However, Afine Investments is 31.14 times more volatile than RMB Holdings. It trades about 0.09 of its potential returns per unit of risk. RMB Holdings is currently generating about 0.01 per unit of risk. If you would invest 40,387 in Afine Investments on September 3, 2024 and sell it today you would earn a total of 5,613 from holding Afine Investments or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afine Investments vs. RMB Holdings
Performance |
| Timeline |
| Afine Investments |
| RMB Holdings |
Afine Investments and RMB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afine Investments and RMB Holdings
The main advantage of trading using opposite Afine Investments and RMB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, RMB Holdings 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 RMB Holdings will offset losses from the drop in RMB Holdings' long position.| Afine Investments vs. Sasol Ltd Bee | Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments vs. Growthpoint Properties |
| RMB Holdings vs. ABSA Bank Limited | RMB Holdings vs. Investec | RMB Holdings vs. Sasol Ltd Bee | RMB Holdings vs. Centaur Bci Balanced |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |