Correlation Between British Amer and Tsogo Sun
Can any of the company-specific risk be diversified away by investing in both British Amer and Tsogo Sun 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 British Amer and Tsogo Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Tsogo Sun, you can compare the effects of market volatilities on British Amer and Tsogo Sun 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 British Amer with a short position of Tsogo Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Tsogo Sun.
Diversification Opportunities for British Amer and Tsogo Sun
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Tsogo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Tsogo Sun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsogo Sun and British Amer 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 British American Tobacco are associated (or correlated) with Tsogo Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsogo Sun has no effect on the direction of British Amer i.e., British Amer and Tsogo Sun go up and down completely randomly.
Pair Corralation between British Amer and Tsogo Sun
Assuming the 90 days trading horizon British American Tobacco is expected to generate 0.49 times more return on investment than Tsogo Sun. However, British American Tobacco is 2.05 times less risky than Tsogo Sun. It trades about 0.5 of its potential returns per unit of risk. Tsogo Sun is currently generating about -0.34 per unit of risk. If you would invest 6,160,000 in British American Tobacco on September 4, 2024 and sell it today you would earn a total of 711,900 from holding British American Tobacco or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
British American Tobacco vs. Tsogo Sun
Performance |
| Timeline |
| British American Tobacco |
| Tsogo Sun |
British Amer and Tsogo Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Tsogo Sun
The main advantage of trading using opposite British Amer and Tsogo Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Tsogo Sun 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 Tsogo Sun will offset losses from the drop in Tsogo Sun's long position.| British Amer vs. Sasol Ltd Bee | British Amer vs. Centaur Bci Balanced | British Amer vs. Growthpoint Properties | British Amer vs. Coronation Global Equity |
| Tsogo Sun vs. Astoria Investments | Tsogo Sun vs. Harmony Gold Mining | Tsogo Sun vs. Afine Investments | Tsogo Sun vs. Copper 360 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |