Correlation Between Capitec Bank and MC Mining
Can any of the company-specific risk be diversified away by investing in both Capitec Bank and MC Mining 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 MC Mining 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 MC Mining, you can compare the effects of market volatilities on Capitec Bank and MC Mining 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 MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitec Bank and MC Mining.
Diversification Opportunities for Capitec Bank and MC Mining
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capitec and MCZ is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining 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 MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Capitec Bank i.e., Capitec Bank and MC Mining go up and down completely randomly.
Pair Corralation between Capitec Bank and MC Mining
Assuming the 90 days trading horizon Capitec Bank Holdings is expected to generate 0.26 times more return on investment than MC Mining. However, Capitec Bank Holdings is 3.78 times less risky than MC Mining. It trades about -0.03 of its potential returns per unit of risk. MC Mining is currently generating about -0.16 per unit of risk. If you would invest 31,299,100 in Capitec Bank Holdings on November 30, 2024 and sell it today you would lose (555,400) from holding Capitec Bank Holdings or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitec Bank Holdings vs. MC Mining
Performance |
| Timeline |
| Capitec Bank Holdings |
| MC Mining |
Capitec Bank and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitec Bank and MC Mining
The main advantage of trading using opposite Capitec Bank and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitec Bank position performs unexpectedly, MC Mining 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 MC Mining will offset losses from the drop in MC Mining's long position.| Capitec Bank vs. Bytes Technology | Capitec Bank vs. CA Sales Holdings | Capitec Bank vs. HomeChoice Investments | Capitec Bank vs. Copper 360 |
| MC Mining vs. Standard Bank Group | MC Mining vs. Deneb Investments | MC Mining vs. Harmony Gold Mining | MC Mining vs. Bytes Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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