Correlation Between TSOGO SUN and PEPKOR
Can any of the company-specific risk be diversified away by investing in both TSOGO SUN and PEPKOR 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 TSOGO SUN and PEPKOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSOGO SUN GAMING and PEPKOR LTD, you can compare the effects of market volatilities on TSOGO SUN and PEPKOR 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 TSOGO SUN with a short position of PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and PEPKOR.
Diversification Opportunities for TSOGO SUN and PEPKOR
Excellent diversification
The 3 months correlation between TSOGO and PEPKOR is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD and TSOGO SUN 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 TSOGO SUN GAMING are associated (or correlated) with PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of TSOGO SUN i.e., TSOGO SUN and PEPKOR go up and down completely randomly.
Pair Corralation between TSOGO SUN and PEPKOR
Assuming the 90 days horizon TSOGO SUN GAMING is expected to under-perform the PEPKOR. But the stock apears to be less risky and, when comparing its historical volatility, TSOGO SUN GAMING is 3.72 times less risky than PEPKOR. The stock trades about -0.01 of its potential returns per unit of risk. The PEPKOR LTD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 43.00 in PEPKOR LTD on September 12, 2024 and sell it today you would earn a total of 107.00 from holding PEPKOR LTD or generate 248.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSOGO SUN GAMING vs. PEPKOR LTD
Performance |
| Timeline |
| TSOGO SUN GAMING |
| PEPKOR LTD |
TSOGO SUN and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSOGO SUN and PEPKOR
The main advantage of trading using opposite TSOGO SUN and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSOGO SUN position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.| TSOGO SUN vs. Sands China | TSOGO SUN vs. Superior Plus Corp | TSOGO SUN vs. SIVERS SEMICONDUCTORS AB | TSOGO SUN vs. Norsk Hydro ASA |
| PEPKOR vs. RYOHIN UNSPADR1 | PEPKOR vs. Superior Plus Corp | PEPKOR vs. SIVERS SEMICONDUCTORS AB | PEPKOR vs. NorAm Drilling AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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