Correlation Between Brimstone Investment and Tiger Brands
Can any of the company-specific risk be diversified away by investing in both Brimstone Investment and Tiger Brands 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 Brimstone Investment and Tiger Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimstone Investment and Tiger Brands, you can compare the effects of market volatilities on Brimstone Investment and Tiger Brands 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 Brimstone Investment with a short position of Tiger Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimstone Investment and Tiger Brands.
Diversification Opportunities for Brimstone Investment and Tiger Brands
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brimstone and Tiger is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and Tiger Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiger Brands and Brimstone Investment 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 Brimstone Investment are associated (or correlated) with Tiger Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiger Brands has no effect on the direction of Brimstone Investment i.e., Brimstone Investment and Tiger Brands go up and down completely randomly.
Pair Corralation between Brimstone Investment and Tiger Brands
Assuming the 90 days trading horizon Brimstone Investment is expected to generate 1.95 times more return on investment than Tiger Brands. However, Brimstone Investment is 1.95 times more volatile than Tiger Brands. It trades about -0.06 of its potential returns per unit of risk. Tiger Brands is currently generating about -0.15 per unit of risk. If you would invest 50,500 in Brimstone Investment on November 28, 2024 and sell it today you would lose (1,500) from holding Brimstone Investment or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimstone Investment vs. Tiger Brands
Performance |
| Timeline |
| Brimstone Investment |
| Tiger Brands |
Brimstone Investment and Tiger Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimstone Investment and Tiger Brands
The main advantage of trading using opposite Brimstone Investment and Tiger Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimstone Investment position performs unexpectedly, Tiger Brands 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 Tiger Brands will offset losses from the drop in Tiger Brands' long position.| Brimstone Investment vs. CA Sales Holdings | Brimstone Investment vs. RCL Foods | Brimstone Investment vs. E Media Holdings | Brimstone Investment vs. Standard Bank Group |
| Tiger Brands vs. Deneb Investments | Tiger Brands vs. Datatec | Tiger Brands vs. City Lodge Hotels | Tiger Brands vs. CA Sales 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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