Correlation Between CA Sales and Safari Investments
Can any of the company-specific risk be diversified away by investing in both CA Sales and Safari Investments 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 Safari Investments 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 Safari Investments RSA, you can compare the effects of market volatilities on CA Sales and Safari Investments 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 Safari Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Safari Investments.
Diversification Opportunities for CA Sales and Safari Investments
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CAA and Safari is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Safari Investments RSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safari Investments RSA 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 Safari Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safari Investments RSA has no effect on the direction of CA Sales i.e., CA Sales and Safari Investments go up and down completely randomly.
Pair Corralation between CA Sales and Safari Investments
Assuming the 90 days trading horizon CA Sales Holdings is expected to generate 0.97 times more return on investment than Safari Investments. However, CA Sales Holdings is 1.03 times less risky than Safari Investments. It trades about 0.05 of its potential returns per unit of risk. Safari Investments RSA is currently generating about -0.21 per unit of risk. If you would invest 157,000 in CA Sales Holdings on August 30, 2024 and sell it today you would earn a total of 3,000 from holding CA Sales Holdings or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CA Sales Holdings vs. Safari Investments RSA
Performance |
| Timeline |
| CA Sales Holdings |
| Safari Investments RSA |
CA Sales and Safari Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Sales and Safari Investments
The main advantage of trading using opposite CA Sales and Safari Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales position performs unexpectedly, Safari Investments 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 Safari Investments will offset losses from the drop in Safari Investments' long position.| CA Sales vs. Growthpoint Properties | CA Sales vs. AfricaRhodium ETF | CA Sales vs. CoreShares Preference Share | CA Sales vs. CoreShares TotalWldStock ETF |
| Safari Investments vs. City Lodge Hotels | Safari Investments vs. Deneb Investments | Safari Investments vs. Hosken Consolidated Investments | Safari Investments vs. Advtech |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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