Correlation Between Capitec Bank and Ninety One
Can any of the company-specific risk be diversified away by investing in both Capitec Bank and Ninety One 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 Ninety One 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 Ninety One, you can compare the effects of market volatilities on Capitec Bank and Ninety One 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 Ninety One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitec Bank and Ninety One.
Diversification Opportunities for Capitec Bank and Ninety One
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capitec and Ninety is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Ninety One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninety One 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 Ninety One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninety One has no effect on the direction of Capitec Bank i.e., Capitec Bank and Ninety One go up and down completely randomly.
Pair Corralation between Capitec Bank and Ninety One
Assuming the 90 days trading horizon Capitec Bank Holdings is expected to generate 0.76 times more return on investment than Ninety One. However, Capitec Bank Holdings is 1.32 times less risky than Ninety One. It trades about 0.23 of its potential returns per unit of risk. Ninety One is currently generating about -0.03 per unit of risk. If you would invest 29,064,300 in Capitec Bank Holdings on August 24, 2024 and sell it today you would earn a total of 4,705,700 from holding Capitec Bank Holdings or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitec Bank Holdings vs. Ninety One
Performance |
| Timeline |
| Capitec Bank Holdings |
| Ninety One |
Capitec Bank and Ninety One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitec Bank and Ninety One
The main advantage of trading using opposite Capitec Bank and Ninety One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitec Bank position performs unexpectedly, Ninety One 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 Ninety One will offset losses from the drop in Ninety One's long position.| Capitec Bank vs. Brimstone Investment | Capitec Bank vs. African Media Entertainment | Capitec Bank vs. Deneb Investments | Capitec Bank vs. CA Sales Holdings |
| Ninety One vs. RCL Foods | Ninety One vs. African Media Entertainment | Ninety One vs. Astral Foods | Ninety One vs. Ascendis Health |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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