Correlation Between Exchange Bankshares and Naspers
Can any of the company-specific risk be diversified away by investing in both Exchange Bankshares and Naspers 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 Exchange Bankshares and Naspers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bankshares and Naspers Limited, you can compare the effects of market volatilities on Exchange Bankshares and Naspers 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 Exchange Bankshares with a short position of Naspers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bankshares and Naspers.
Diversification Opportunities for Exchange Bankshares and Naspers
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exchange and Naspers is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and Naspers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naspers Limited and Exchange Bankshares 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 Exchange Bankshares are associated (or correlated) with Naspers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naspers Limited has no effect on the direction of Exchange Bankshares i.e., Exchange Bankshares and Naspers go up and down completely randomly.
Pair Corralation between Exchange Bankshares and Naspers
Given the investment horizon of 90 days Exchange Bankshares is expected to generate 0.69 times more return on investment than Naspers. However, Exchange Bankshares is 1.46 times less risky than Naspers. It trades about 0.18 of its potential returns per unit of risk. Naspers Limited is currently generating about -0.08 per unit of risk. If you would invest 3,964 in Exchange Bankshares on October 26, 2024 and sell it today you would earn a total of 826.00 from holding Exchange Bankshares or generate 20.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Bankshares vs. Naspers Limited
Performance |
| Timeline |
| Exchange Bankshares |
| Naspers Limited |
Exchange Bankshares and Naspers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bankshares and Naspers
The main advantage of trading using opposite Exchange Bankshares and Naspers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bankshares position performs unexpectedly, Naspers 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 Naspers will offset losses from the drop in Naspers' long position.| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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