Correlation Between EQUITY GROUP and HOME AFRIKA
Can any of the company-specific risk be diversified away by investing in both EQUITY GROUP and HOME AFRIKA 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 EQUITY GROUP and HOME AFRIKA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQUITY GROUP HOLDINGS and HOME AFRIKA LTD, you can compare the effects of market volatilities on EQUITY GROUP and HOME AFRIKA 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 EQUITY GROUP with a short position of HOME AFRIKA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQUITY GROUP and HOME AFRIKA.
Diversification Opportunities for EQUITY GROUP and HOME AFRIKA
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EQUITY and HOME is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EQUITY GROUP HOLDINGS and HOME AFRIKA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME AFRIKA LTD and EQUITY GROUP 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 EQUITY GROUP HOLDINGS are associated (or correlated) with HOME AFRIKA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME AFRIKA LTD has no effect on the direction of EQUITY GROUP i.e., EQUITY GROUP and HOME AFRIKA go up and down completely randomly.
Pair Corralation between EQUITY GROUP and HOME AFRIKA
Assuming the 90 days trading horizon EQUITY GROUP HOLDINGS is expected to under-perform the HOME AFRIKA. But the stock apears to be less risky and, when comparing its historical volatility, EQUITY GROUP HOLDINGS is 2.99 times less risky than HOME AFRIKA. The stock trades about -0.16 of its potential returns per unit of risk. The HOME AFRIKA LTD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 32.00 in HOME AFRIKA LTD on September 4, 2024 and sell it today you would earn a total of 3.00 from holding HOME AFRIKA LTD or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EQUITY GROUP HOLDINGS vs. HOME AFRIKA LTD
Performance |
| Timeline |
| EQUITY GROUP HOLDINGS |
| HOME AFRIKA LTD |
EQUITY GROUP and HOME AFRIKA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQUITY GROUP and HOME AFRIKA
The main advantage of trading using opposite EQUITY GROUP and HOME AFRIKA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQUITY GROUP position performs unexpectedly, HOME AFRIKA 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 HOME AFRIKA will offset losses from the drop in HOME AFRIKA's long position.| EQUITY GROUP vs. HOME AFRIKA LTD | EQUITY GROUP vs. CIC INSURANCE GROUP | EQUITY GROUP vs. HOMEBOYZ ENTERTAINMENT PLC | EQUITY GROUP vs. CARBACID INVESTMENTS LTD |
| HOME AFRIKA vs. EQUITY GROUP HOLDINGS | HOME AFRIKA vs. ABSA BANK OF | HOME AFRIKA vs. BRITISH AMERICAN TOBACCO | HOME AFRIKA vs. CO OPERATIVE BANK OF |
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 CEOs Directory module to screen CEOs from public companies around the world.
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