Correlation Between Capitec Bank and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Capitec Bank and Astoria 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 Capitec Bank and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitec Bank Holdings and Astoria Investments, you can compare the effects of market volatilities on Capitec Bank and Astoria 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 Capitec Bank with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitec Bank and Astoria Investments.
Diversification Opportunities for Capitec Bank and Astoria Investments
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capitec and Astoria is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Capitec Bank 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 Capitec Bank Holdings are associated (or correlated) with Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Capitec Bank i.e., Capitec Bank and Astoria Investments go up and down completely randomly.
Pair Corralation between Capitec Bank and Astoria Investments
Assuming the 90 days trading horizon Capitec Bank Holdings is expected to generate 0.47 times more return on investment than Astoria Investments. However, Capitec Bank Holdings is 2.12 times less risky than Astoria Investments. It trades about 0.08 of its potential returns per unit of risk. Astoria Investments is currently generating about 0.02 per unit of risk. If you would invest 17,292,200 in Capitec Bank Holdings on October 21, 2024 and sell it today you would earn a total of 12,926,200 from holding Capitec Bank Holdings or generate 74.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitec Bank Holdings vs. Astoria Investments
Performance |
| Timeline |
| Capitec Bank Holdings |
| Astoria Investments |
Capitec Bank and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitec Bank and Astoria Investments
The main advantage of trading using opposite Capitec Bank and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitec Bank position performs unexpectedly, Astoria 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.| Capitec Bank vs. Datatec | Capitec Bank vs. Brimstone Investment | Capitec Bank vs. Astral Foods | Capitec Bank vs. HomeChoice Investments |
| Astoria Investments vs. Hosken Consolidated Investments | Astoria Investments vs. Trematon Capital Investments | Astoria Investments vs. Deneb Investments | Astoria Investments vs. RCL 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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