Correlation Between EMedia Holdings and Afine Investments
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and Afine 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 EMedia Holdings and Afine Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMedia Holdings Limited and Afine Investments, you can compare the effects of market volatilities on EMedia Holdings and Afine 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 EMedia Holdings with a short position of Afine Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and Afine Investments.
Diversification Opportunities for EMedia Holdings and Afine Investments
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between EMedia and Afine is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments and EMedia Holdings 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 eMedia Holdings Limited are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and Afine Investments go up and down completely randomly.
Pair Corralation between EMedia Holdings and Afine Investments
Assuming the 90 days trading horizon eMedia Holdings Limited is expected to under-perform the Afine Investments. In addition to that, EMedia Holdings is 2.08 times more volatile than Afine Investments. It trades about -0.1 of its total potential returns per unit of risk. Afine Investments is currently generating about -0.06 per unit of volatility. If you would invest 40,200 in Afine Investments on December 11, 2024 and sell it today you would lose (1,600) from holding Afine Investments or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMedia Holdings Limited vs. Afine Investments
Performance |
| Timeline |
| eMedia Holdings |
| Afine Investments |
EMedia Holdings and Afine Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMedia Holdings and Afine Investments
The main advantage of trading using opposite EMedia Holdings and Afine Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, Afine 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 Afine Investments will offset losses from the drop in Afine Investments' long position.| EMedia Holdings vs. E Media Holdings | EMedia Holdings vs. African Media Entertainment | EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Bytes Technology |
| Afine Investments vs. Frontier Transport Holdings | Afine Investments vs. Boxer Retail | Afine Investments vs. Harmony Gold Mining | Afine Investments vs. Zeder Investments |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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