Correlation Between CA Sales and Nedbank
Can any of the company-specific risk be diversified away by investing in both CA Sales and Nedbank 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 Nedbank 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 Nedbank Group, you can compare the effects of market volatilities on CA Sales and Nedbank 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 Nedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Nedbank.
Diversification Opportunities for CA Sales and Nedbank
Excellent diversification
The 3 months correlation between CAA and Nedbank is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Nedbank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nedbank Group 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 Nedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nedbank Group has no effect on the direction of CA Sales i.e., CA Sales and Nedbank go up and down completely randomly.
Pair Corralation between CA Sales and Nedbank
Assuming the 90 days trading horizon CA Sales is expected to generate 1.02 times less return on investment than Nedbank. In addition to that, CA Sales is 1.61 times more volatile than Nedbank Group. It trades about 0.06 of its total potential returns per unit of risk. Nedbank Group is currently generating about 0.1 per unit of volatility. If you would invest 2,010,324 in Nedbank Group on October 22, 2024 and sell it today you would earn a total of 839,676 from holding Nedbank Group or generate 41.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CA Sales Holdings vs. Nedbank Group
Performance |
| Timeline |
| CA Sales Holdings |
| Nedbank Group |
CA Sales and Nedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Sales and Nedbank
The main advantage of trading using opposite CA Sales and Nedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales position performs unexpectedly, Nedbank 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 Nedbank will offset losses from the drop in Nedbank's long position.| CA Sales vs. Life Healthcare | CA Sales vs. Astral Foods | CA Sales vs. Harmony Gold Mining | CA Sales vs. Ascendis Health |
| Nedbank vs. Master Drilling Group | Nedbank vs. Zeder Investments | Nedbank vs. CA Sales Holdings | Nedbank vs. Astral Foods |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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