Correlation Between Bowler Metcalf and African Media
Can any of the company-specific risk be diversified away by investing in both Bowler Metcalf and African 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 Bowler Metcalf and African Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowler Metcalf and African Media Entertainment, you can compare the effects of market volatilities on Bowler Metcalf and African 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 Bowler Metcalf with a short position of African Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowler Metcalf and African Media.
Diversification Opportunities for Bowler Metcalf and African Media
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bowler and African is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bowler Metcalf and African Media Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Media Entert and Bowler Metcalf 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 Bowler Metcalf are associated (or correlated) with African Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Media Entert has no effect on the direction of Bowler Metcalf i.e., Bowler Metcalf and African Media go up and down completely randomly.
Pair Corralation between Bowler Metcalf and African Media
Assuming the 90 days trading horizon Bowler Metcalf is expected to generate 0.47 times more return on investment than African Media. However, Bowler Metcalf is 2.13 times less risky than African Media. It trades about 0.03 of its potential returns per unit of risk. African Media Entertainment is currently generating about -0.07 per unit of risk. If you would invest 132,500 in Bowler Metcalf on August 24, 2024 and sell it today you would earn a total of 1,000.00 from holding Bowler Metcalf or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowler Metcalf vs. African Media Entertainment
Performance |
| Timeline |
| Bowler Metcalf |
| African Media Entert |
Bowler Metcalf and African Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowler Metcalf and African Media
The main advantage of trading using opposite Bowler Metcalf and African Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowler Metcalf position performs unexpectedly, African 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 African Media will offset losses from the drop in African Media's long position.| Bowler Metcalf vs. Ascendis Health | Bowler Metcalf vs. Safari Investments RSA | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. African Media Entertainment |
| African Media vs. Sasol Ltd Bee | African Media vs. Centaur Bci Balanced | African Media vs. Sabvest Capital | African Media vs. Growthpoint Properties |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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