Correlation Between Brimstone Investment and EMedia Holdings
Can any of the company-specific risk be diversified away by investing in both Brimstone Investment and EMedia Holdings 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 EMedia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimstone Investment and eMedia Holdings Limited, you can compare the effects of market volatilities on Brimstone Investment and EMedia Holdings 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 EMedia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimstone Investment and EMedia Holdings.
Diversification Opportunities for Brimstone Investment and EMedia Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brimstone and EMedia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and eMedia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMedia Holdings 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 EMedia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMedia Holdings has no effect on the direction of Brimstone Investment i.e., Brimstone Investment and EMedia Holdings go up and down completely randomly.
Pair Corralation between Brimstone Investment and EMedia Holdings
Assuming the 90 days trading horizon Brimstone Investment is expected to under-perform the EMedia Holdings. In addition to that, Brimstone Investment is 2.93 times more volatile than eMedia Holdings Limited. It trades about -0.17 of its total potential returns per unit of risk. eMedia Holdings Limited is currently generating about -0.35 per unit of volatility. If you would invest 34,600 in eMedia Holdings Limited on August 28, 2024 and sell it today you would lose (3,500) from holding eMedia Holdings Limited or give up 10.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimstone Investment vs. eMedia Holdings Limited
Performance |
| Timeline |
| Brimstone Investment |
| eMedia Holdings |
Brimstone Investment and EMedia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimstone Investment and EMedia Holdings
The main advantage of trading using opposite Brimstone Investment and EMedia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimstone Investment position performs unexpectedly, EMedia Holdings 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 EMedia Holdings will offset losses from the drop in EMedia Holdings' long position.| Brimstone Investment vs. RCL Foods | Brimstone Investment vs. Oceana | Brimstone Investment vs. Brimstone Investment |
| EMedia Holdings vs. Centaur Bci Balanced | EMedia Holdings vs. Growthpoint Properties | EMedia Holdings vs. Bowler Metcalf | EMedia Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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