Correlation Between Brait SE and Remgro
Can any of the company-specific risk be diversified away by investing in both Brait SE and Remgro 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 Brait SE and Remgro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brait SE and Remgro, you can compare the effects of market volatilities on Brait SE and Remgro 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 Brait SE with a short position of Remgro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brait SE and Remgro.
Diversification Opportunities for Brait SE and Remgro
Poor diversification
The 3 months correlation between Brait and Remgro is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Brait SE and Remgro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remgro and Brait SE 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 Brait SE are associated (or correlated) with Remgro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remgro has no effect on the direction of Brait SE i.e., Brait SE and Remgro go up and down completely randomly.
Pair Corralation between Brait SE and Remgro
Assuming the 90 days trading horizon Brait SE is expected to generate 1.67 times more return on investment than Remgro. However, Brait SE is 1.67 times more volatile than Remgro. It trades about 0.44 of its potential returns per unit of risk. Remgro is currently generating about -0.18 per unit of risk. If you would invest 16,000 in Brait SE on August 27, 2024 and sell it today you would earn a total of 3,600 from holding Brait SE or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brait SE vs. Remgro
Performance |
| Timeline |
| Brait SE |
| Remgro |
Brait SE and Remgro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brait SE and Remgro
The main advantage of trading using opposite Brait SE and Remgro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brait SE position performs unexpectedly, Remgro 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 Remgro will offset losses from the drop in Remgro's long position.| Brait SE vs. Deneb Investments | Brait SE vs. Life Healthcare | Brait SE vs. Brimstone Investment | Brait SE vs. ABSA Bank Limited |
| Remgro vs. Centaur Bci Balanced | Remgro vs. Growthpoint Properties | Remgro vs. Bowler Metcalf | Remgro vs. Shoprite 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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