Correlation Between Aspen Pharmacare and E Media
Can any of the company-specific risk be diversified away by investing in both Aspen Pharmacare and E Media 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 Aspen Pharmacare and E Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Pharmacare Holdings and E Media Holdings, you can compare the effects of market volatilities on Aspen Pharmacare and E Media 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 Aspen Pharmacare with a short position of E Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Pharmacare and E Media.
Diversification Opportunities for Aspen Pharmacare and E Media
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aspen and EMH is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Pharmacare Holdings and E Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Media Holdings and Aspen Pharmacare 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 Aspen Pharmacare Holdings are associated (or correlated) with E Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Media Holdings has no effect on the direction of Aspen Pharmacare i.e., Aspen Pharmacare and E Media go up and down completely randomly.
Pair Corralation between Aspen Pharmacare and E Media
Assuming the 90 days trading horizon Aspen Pharmacare Holdings is expected to generate 0.43 times more return on investment than E Media. However, Aspen Pharmacare Holdings is 2.3 times less risky than E Media. It trades about -0.46 of its potential returns per unit of risk. E Media Holdings is currently generating about -0.2 per unit of risk. If you would invest 1,822,100 in Aspen Pharmacare Holdings on August 29, 2024 and sell it today you would lose (141,900) from holding Aspen Pharmacare Holdings or give up 7.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Pharmacare Holdings vs. E Media Holdings
Performance |
| Timeline |
| Aspen Pharmacare Holdings |
| E Media Holdings |
Aspen Pharmacare and E Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Pharmacare and E Media
The main advantage of trading using opposite Aspen Pharmacare and E Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Pharmacare position performs unexpectedly, E Media 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 E Media will offset losses from the drop in E Media's long position.| Aspen Pharmacare vs. RCL Foods | Aspen Pharmacare vs. Advtech | Aspen Pharmacare vs. Allied Electronics | Aspen Pharmacare vs. British American Tobacco |
| E Media vs. Allied Electronics | E Media vs. Advtech | E Media vs. Hosken Consolidated Investments | E Media vs. Frontier Transport Holdings |
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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