Correlation Between CA Sales and Advtech
Can any of the company-specific risk be diversified away by investing in both CA Sales and Advtech 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 CA Sales and Advtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CA Sales Holdings and Advtech, you can compare the effects of market volatilities on CA Sales and Advtech 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 CA Sales with a short position of Advtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Advtech.
Diversification Opportunities for CA Sales and Advtech
Significant diversification
The 3 months correlation between CAA and Advtech is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Advtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advtech and CA Sales 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 CA Sales Holdings are associated (or correlated) with Advtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advtech has no effect on the direction of CA Sales i.e., CA Sales and Advtech go up and down completely randomly.
Pair Corralation between CA Sales and Advtech
Assuming the 90 days trading horizon CA Sales Holdings is expected to generate 1.49 times more return on investment than Advtech. However, CA Sales is 1.49 times more volatile than Advtech. It trades about 0.1 of its potential returns per unit of risk. Advtech is currently generating about 0.09 per unit of risk. If you would invest 60,633 in CA Sales Holdings on August 30, 2024 and sell it today you would earn a total of 99,367 from holding CA Sales Holdings or generate 163.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CA Sales Holdings vs. Advtech
Performance |
| Timeline |
| CA Sales Holdings |
| Advtech |
CA Sales and Advtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Sales and Advtech
The main advantage of trading using opposite CA Sales and Advtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales position performs unexpectedly, Advtech 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 Advtech will offset losses from the drop in Advtech's long position.| CA Sales vs. Growthpoint Properties | CA Sales vs. AfricaRhodium ETF | CA Sales vs. CoreShares Preference Share | CA Sales vs. CoreShares TotalWldStock ETF |
| Advtech vs. Reinet Investments SCA | Advtech vs. Safari Investments RSA | Advtech vs. Brimstone Investment | Advtech vs. HomeChoice Investments |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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