Correlation Between EMedia Holdings and Dis Chem
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and Dis Chem 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 Dis Chem 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 Dis Chem Pharmacies, you can compare the effects of market volatilities on EMedia Holdings and Dis Chem 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 Dis Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and Dis Chem.
Diversification Opportunities for EMedia Holdings and Dis Chem
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between EMedia and Dis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and Dis Chem Pharmacies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dis Chem Pharmacies 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 Dis Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dis Chem Pharmacies has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and Dis Chem go up and down completely randomly.
Pair Corralation between EMedia Holdings and Dis Chem
Assuming the 90 days trading horizon EMedia Holdings is expected to generate 8.08 times less return on investment than Dis Chem. In addition to that, EMedia Holdings is 1.58 times more volatile than Dis Chem Pharmacies. It trades about 0.01 of its total potential returns per unit of risk. Dis Chem Pharmacies is currently generating about 0.09 per unit of volatility. If you would invest 231,470 in Dis Chem Pharmacies on August 31, 2024 and sell it today you would earn a total of 147,530 from holding Dis Chem Pharmacies or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
eMedia Holdings Limited vs. Dis Chem Pharmacies
Performance |
| Timeline |
| eMedia Holdings |
| Dis Chem Pharmacies |
EMedia Holdings and Dis Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMedia Holdings and Dis Chem
The main advantage of trading using opposite EMedia Holdings and Dis Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, Dis Chem 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 Dis Chem will offset losses from the drop in Dis Chem's long position.| EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Astral Foods | EMedia Holdings vs. Astoria Investments | EMedia Holdings vs. ABSA Bank Limited |
| Dis Chem vs. Reinet Investments SCA | Dis Chem vs. Astral Foods | Dis Chem vs. Frontier Transport Holdings | Dis Chem vs. Blue Label Telecoms |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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