Correlation Between Aspen Pharmacare and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both Aspen Pharmacare and Impala Platinum 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 Impala Platinum 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 Impala Platinum Holdings, you can compare the effects of market volatilities on Aspen Pharmacare and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Pharmacare and Impala Platinum.
Diversification Opportunities for Aspen Pharmacare and Impala Platinum
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aspen and Impala is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Pharmacare Holdings and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Aspen Pharmacare i.e., Aspen Pharmacare and Impala Platinum go up and down completely randomly.
Pair Corralation between Aspen Pharmacare and Impala Platinum
Assuming the 90 days trading horizon Aspen Pharmacare Holdings is expected to generate 0.23 times more return on investment than Impala Platinum. However, Aspen Pharmacare Holdings is 4.44 times less risky than Impala Platinum. It trades about -0.49 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.27 per unit of risk. If you would invest 1,822,100 in Aspen Pharmacare Holdings on August 28, 2024 and sell it today you would lose (149,000) from holding Aspen Pharmacare Holdings or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Pharmacare Holdings vs. Impala Platinum Holdings
Performance |
| Timeline |
| Aspen Pharmacare Holdings |
| Impala Platinum Holdings |
Aspen Pharmacare and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Pharmacare and Impala Platinum
The main advantage of trading using opposite Aspen Pharmacare and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Pharmacare position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| Aspen Pharmacare vs. RCL Foods | Aspen Pharmacare vs. Advtech | Aspen Pharmacare vs. Allied Electronics | Aspen Pharmacare vs. British American Tobacco |
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 Stocks Directory module to find actively traded stocks across global markets.
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