Correlation Between CA Sales and Firstrand
Can any of the company-specific risk be diversified away by investing in both CA Sales and Firstrand 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 Firstrand 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 Firstrand, you can compare the effects of market volatilities on CA Sales and Firstrand 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 Firstrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Firstrand.
Diversification Opportunities for CA Sales and Firstrand
Pay attention - limited upside
The 3 months correlation between CAA and Firstrand is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Firstrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firstrand 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 Firstrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firstrand has no effect on the direction of CA Sales i.e., CA Sales and Firstrand go up and down completely randomly.
Pair Corralation between CA Sales and Firstrand
Assuming the 90 days trading horizon CA Sales Holdings is expected to generate 1.56 times more return on investment than Firstrand. However, CA Sales is 1.56 times more volatile than Firstrand. It trades about 0.13 of its potential returns per unit of risk. Firstrand is currently generating about 0.09 per unit of risk. If you would invest 118,000 in CA Sales Holdings on August 31, 2024 and sell it today you would earn a total of 51,400 from holding CA Sales Holdings or generate 43.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CA Sales Holdings vs. Firstrand
Performance |
| Timeline |
| CA Sales Holdings |
| Firstrand |
CA Sales and Firstrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Sales and Firstrand
The main advantage of trading using opposite CA Sales and Firstrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales position performs unexpectedly, Firstrand 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 Firstrand will offset losses from the drop in Firstrand's long position.| CA Sales vs. Kap Industrial Holdings | CA Sales vs. City Lodge Hotels | CA Sales vs. RCL Foods | CA Sales vs. E Media Holdings |
| Firstrand vs. Capitec Bank Holdings | Firstrand vs. Reinet Investments SCA | Firstrand vs. Astral Foods | Firstrand 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| 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 |