Correlation Between Frontier Transport and Hosken Consolidated
Can any of the company-specific risk be diversified away by investing in both Frontier Transport and Hosken Consolidated 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 Frontier Transport and Hosken Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Transport Holdings and Hosken Consolidated Investments, you can compare the effects of market volatilities on Frontier Transport and Hosken Consolidated 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 Frontier Transport with a short position of Hosken Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Transport and Hosken Consolidated.
Diversification Opportunities for Frontier Transport and Hosken Consolidated
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Frontier and Hosken is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Transport Holdings and Hosken Consolidated Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hosken Consolidated and Frontier Transport 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 Frontier Transport Holdings are associated (or correlated) with Hosken Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hosken Consolidated has no effect on the direction of Frontier Transport i.e., Frontier Transport and Hosken Consolidated go up and down completely randomly.
Pair Corralation between Frontier Transport and Hosken Consolidated
Assuming the 90 days trading horizon Frontier Transport Holdings is expected to generate 2.42 times more return on investment than Hosken Consolidated. However, Frontier Transport is 2.42 times more volatile than Hosken Consolidated Investments. It trades about 0.06 of its potential returns per unit of risk. Hosken Consolidated Investments is currently generating about 0.03 per unit of risk. If you would invest 34,191 in Frontier Transport Holdings on August 24, 2024 and sell it today you would earn a total of 38,809 from holding Frontier Transport Holdings or generate 113.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Frontier Transport Holdings vs. Hosken Consolidated Investment
Performance |
| Timeline |
| Frontier Transport |
| Hosken Consolidated |
Frontier Transport and Hosken Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Transport and Hosken Consolidated
The main advantage of trading using opposite Frontier Transport and Hosken Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Transport position performs unexpectedly, Hosken Consolidated 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 Hosken Consolidated will offset losses from the drop in Hosken Consolidated's long position.| Frontier Transport vs. Centaur Bci Balanced | Frontier Transport vs. Growthpoint Properties | Frontier Transport vs. Bowler Metcalf | Frontier Transport vs. Shoprite Holdings |
| Hosken Consolidated vs. Kap Industrial Holdings | Hosken Consolidated vs. Deneb Investments | Hosken Consolidated vs. Brikor |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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